Creativity, confidence and focus have seen us survive hard times

A  house at Itrade Park Estate in  Ruiru, the company’s first project. PHOTO| CORRESPONDENT

What you need to know:

  • He explains that they have achieved this through dedicated teamwork as both the management and staff put in long hours to ensure that projects are delivered on time and according to customer specifications.
  • “This has ensured that we deliver what is on paper from the construction to the finishing,” he adds.
  • Before embarking on any project, Itrade Company conducts market diligence and feasibility studies.

At a time when the real estate sector is hurting, Itrade Company Ltd is reaping huge returns on its investments. The company, which is about 11 years old, is perhaps the only property developer that cuts across the entire spectrum of real estate.

Itrade Company runs four lines of business, all in the real-estate sector, giving it  an end-to-end market position. Unlike other real estate developers that specialise in one area, Itrade Company sells property (housing and serviced plots), is a contractor, builds for sale and to rent, and supplies building materials. This has positioned it as a one-stop shop for all real estate development needs.

The four lines of business ensure that money from one arm of the company goes to another arm. It is a unique business and financial model that ensures that money circulates, and remains locked, within the business.

This model has seen the developer grow at a time when the real estate market is grappling with a market slowdown.

“In the last two years, our annual turnover has grown from Sh149 million to Sh410 million, says Mr Samuel Njenga, the company’s managing director. The end-to-end model ensures that the company remains afloat even when one arm of the business is not doing well.

BUILT TRUST

In the last 10 years the company has built trust in the market by going for projects it can deliver.

“In fact, we have not undertaken any mega project. But from the small-scale ones that we have developed, we have earned referrals,” says Mr Tirus Kamau Mutoru, the general manager.

He explains that they have achieved this through dedicated teamwork as both the management and staff put in long hours to ensure that projects are delivered on time and according to customer specifications.

“This has ensured that we deliver what is on paper from the construction to the finishing,” he adds.

Before embarking on any project, Itrade Company conducts market diligence and feasibility studies.

“We have to get the business case first,” says Mr Kamau. After understanding what is on the market, the company strives to innovate it further to give clients value. It helps that the company’s directors boast different professional backgrounds including banking, legal, interior design, structural and civil engineering, and marketing.

As a result they do more than just document business propositions and put together market concepts that appeal to a broad base of clients, says Mr Kamau. This makes it possible for them to tailor their products to specific customers’ needs.

They also attribute the company’s growth to the capping of interest rates on bank loans. “We had borrowed huge amounts of money and the capping has significantly reduced our repayment amounts,” offers Mr Njenga.

The company has gained popularity because of its flexible payment terms. For all their property and development projects, they allow one year for  purchase. “But we also listen to our clients and design a customised payment plan that suits their pocket,” adds Mr Kamau.

However, it is market trust that has propelled their growth. “Not until the market trusts you can you do good business,” says Mr Njenga. Developers should deliver to their clients what they promise on paper.

Itrade Company also engages professionals at all stages of development. For every project they engage experienced structural and civil engineers as well as architects. This ensures close monitoring of the work and that quality standards are adhered to.

“Professionalism is very key to us because we have to adhere to, and even surpass, the set quality standards,” says Mr Kamau, adding, “The building staff are also people with demonstrated technical experience in the sector.”

All these have seen the company put together appealing concepts on the market. Its first project, Itrade Park, comprised bungalows in Ruiru, off the Eastern by-pass. “It ushered us into the real estate development market. We learnt a lot from it,” says Mr Njenga.

To remain innovative and vibrant, the firm listens to its consumers, even as it remains informed by emerging trends in the industry.  The product development committee gathers information from the market then sits down to process and refine it into innovative solutions. “A lot goes into being customer-centric as we review and visualise our own designs, and the committee executes product innovation to give state-of-the-art housing solutions and services to our customers,” says Mr Njenga.

The last few years have seen rents and the cost of houses shoot up in the country  while purchases and occupancy rates have gone down.

The middle class has responded by buying land to build their own houses. This has seen the real-estate sector stagnate.

In a bid to tap into this market, Itrade Company has positioned itself in the market as a construction partner, helping Kenyans who own plots to build their dream home, instead of letting them lie idle while they pay rent.

“We come in as a partner and develop with you. Our dream is to see every Kenyan with a roof over their heads,” says Mr Njenga.

This is a market that not many real estate players have ventured into. The client can enter into a full contract, whereby Itrade Company supplies the building materials and labour and charges the client.

The other option is a labour contract, in which case the client provides the materials while the developer provides labour and expertise and manages the project.

MOST POPULAR METHODS

“These two options are the most popular methods on the market. They are mainly preferred by private individuals who have acquired plots through Saccos and investment groups (chamas) to own a home,” says Mr Kamau.

This has enabled the firm to solidify its catchment base around Nairobi, notably Kahawa Sukari, Membley, Varsity Ville, Clay City, Kahawa West, Lower Kabete, Ruiru, the Eastern bypass, as well as Machakos and Thika.

“We go where we are needed,” says Mr Njenga. They have also been involved in building and construction works for companies, saccos, and county governments.

The company is also sells  serviced plots – with water, electricity and perimeter wall. This gated-community set-up ensures security and creates order in the way their clients build their houses.

“We do not dictate the design of the houses,” Mr Kamau notes.

Realestate investment is highly capital-intensive, a challenge that many developers struggle with. Over the years, Itrade Company has been able to pool resources from members’ contributions, bank loans and financing from their other lines of business to finance housing developments.

“The Kenya Commercial Bank (KCB) credit facility has been very supportive,” says Mr Njenga.

Itrade Company started out in 2004 as a chama with only five members, with each  contributing Sh5,000 per month. By 2006, the membership had doubled and the contribution was raised to Sh7,000. They bought stocks and the Nairobi Securities Exchange (NSE) and the group evolved into a limited company in 2006.

“We registered the company and all the 10 members became shareholders,” says Mr Njenga.

In 2009, three more members joined, bringing the number of shareholders to 13.

Eleven years ago, their main business was buying and selling  land.

“We would buy large chunks of land, sub-divide it  and sell the parcels,” says Mr Njenga. This went on until in 2012, when they added another line of business as developers. “We began building houses for sale,” he offers.

The developer also runs Styles &Finishes Hardware, a classy, specialist hardware shop that stocks high quality self-finish items.

In addition, it is  a registered contractor and has been undertaking building and construction for NGOs, private companies, individuals and the county government of Machakos in the last two years.

The directors have  separated the four businesses in such a way hat they all run independently but are managed as one entity.

“This ensures smooth daily running of the businesses,” he adds.

The directors serve as the managers ment  but the other positions are hired for competitively. The company has a total of 19 employees.

But the fact that the owners run the business has helped them maintain high levels of execution.

 “We put in a lot more time and effort. We cannot afford not to deliver,” says Mr Kamau. He adds that the company has benefited greatly from the passion of its directors in the day-to-day operations,  something that has given them an edge in the market.

“We grew up together and have known each other for years, and this helps us discuss the business freely and we are not afraid to try out any new market concepts,” offers Mr Njenga.

 

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Unique designs that blend in are our strength

Itrade Gardens in Ruiru is the company’s third project and has drawn lessons from the first two projects, Itrade Park and Signature Apartments, says Mr Kamau. The Sh60 million Itrade Park was well received and sold out fast. But it is the Sh120 million Signature Apartments that has made a name for Itrade Company. “Signature Apartments is our signature in the market. With it, we showcased our strength and that there is no limit to how far we can dream in real estate development,” says Mr Njenga.

Signature Apartments was fully sold by the time the development was midway. Located in Lower Kabete, Signature Apartments, was informed by the location. Lower Kabete is a high-density area for the middle-class. Putting up a spacious and luxurious apartment block seemed a unique proposition,” says Mr Kamau.  Location informs their project designs. For instance, at Itrade Gardens, they have dbuilt maisonettes — which are common in the area — but with unique designs.

“We do not disturb the general ambience of an area. That way, we easily blend in,” says Mr Njenga. Itrade Gardens is located about 900 metres off the Eastern By-pass, and 25 kilometres from the Nairobi city centre, offering a serene environment not far from the city. The Sh150 million project is bigger than Signature Apartments. The gated-community project broke ground in mid-September and construction of three- and four-bedroom maisonettes has started. The developers are sinking a borehole to complement the City County’s supply, and a children’s play area has been earmarked. The houses will also have solar water heaters, a perimeter wall with electric fencing, cabro-paved roads, a parking area, and the houses will be Internet-ready.

There are also plans to employ the latest waste management technology,  which is environmentally friendly solutions.  The maisonettes are going for between Sh6million and Sh15million off-plan.

“We have already sold 40 per cent of the development,” says Mr Njenga.  The project will be completed  in 12 months.