Safaricom Investment Co-operative cashes in on the housing market

Thursday February 11 2016

Bird's eye view of housing developments in

Bird's eye view of housing developments in Langata area. PHOTO| EVANS HABIL 

By IMMACULATE WAIRIMU
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When Safaricom Investment Co-operative (SIC), was launched in February 2009, its core business was land buying and selling. Later on, the management realised that there was opportunity in the housing market and decided to venture into it.

The result? Phase one of Blue Bells Garden Apartments in Mlolongo, on Mombasa road, comprising of 140 three bedroom units. In January 30 this year, the co-operative launched phase two,

comprising of another 140 three bedroom units.

“When we brought up the idea of venturing into housing development, the shareholders thought it might be too ambitious, but here we are today, breaking ground for the construction of another phase,” says Mackrine Abukah, Safaricom Investment Co-operative (SIC) board chairperson.

The apartments will sell at Sh7.3M, about 2M more than what it cost to buy a similar apartment in phase one. “The three bedroom units in our inaugural phase were initially going for Sh5.5M, but once construction was completed, the cost rose to Sh6.8M,” adds Mrs Abukah.

Just like the houses on phase one, they will be fitted with modern finishes, adequate ventilation and well-lit rooms with large windows, kitchen fitted with inbuilt MDF cabinets and solid granite worktops, MDF wardrobes in the bedrooms and a laundry area.

The development will also have 1000 litres of stored water. Phase two will share six shop units, spacious green open spaces that serve as play areas, and a manned security gate with phase one. Each unit will have a designated parking slot. 

Mrs Abukah points out that in most developments in Kenya, the contractor is also the developer, meaning that there is no professional supervision of the quality of work that will be delivered.

“At the end of such a project, if there is anything that has not been done to specification, the investor has to grapple with the consequences – this project has been overseen by architects, project managers and contractors.”

HAPPY WITH THEIR INVESTMENTS

“None of our investors have complained about the quality of work done, and those living in phase one are happy with their investment,” she adds.

The need for housing in Kenya is growing, bearing in mind that rural-urban migration is growing, with 80 per cent of the Kenyan population moving to towns where there are more opportunities, better infrastructure and amenities, according to Philip

Gachuko, Ag commissioner for cooperative development.

Available statistics put the annual demand for housing at 200,000 in urban areas, and 350, 000 in the rural areas. Co-operatives have been seen as the best vehicle to mobilise resources for middle and low-income level individuals yearning to invest in land and

housing, on the principle of being people centric and mutual business, among others.  

“It is envisaged that the corperativ movement will be able to contribute 25 per cent of this demand,” says Ali Noor Ismail, principal secretary, State Department of Cooperative Development, in the Ministry of Industrialisation and Enterprise Development.

It is the desire of all developers though, that the government provide social amenities in all developing areas to reduce the cost burden on the developer. For instance, there are locations where land is good, but access is a challenge, making the end product

expensive. If necessary infrastructure to a development is provided, a unit’s selling price would ultimately be cheaper.

“In this development for instance, we have had to incur the cost of waste water treatment. If there was a sewer line in place, we would have just tapped on it - the cost of installing the waste water treatment equipment cost over Sh5M,” explains Abukah.

SIC is also developing 54 apartments in Ruaka, in the outskirts of the city centre, which they expect to complete by June this year, as well as 130 units in Rongai that are almost complete.