Upgrading of Thika Road has totally transformed the route

Thursday March 10 2016

One of the houses constructed by Home Afrika

One of the houses constructed by Home Afrika under the Mitini Scapes Housing Development located at Migaa Golf Estate. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP 

More by this Author

The construction of the Thika Superhighway has brought about a lot of change in areas neighbouring it. Home ownership along this major road has been one of the fundamental drivers of change in landscape as the area now boasts a number of multibillion residential, and commercial developments.

Property values along the superhighway have in some instances gone up by 1,000 per cent, with land owners capitalising on the expected demand when the surrounding areas open up, as new developments keep coming up every so often.

Two weeks ago, Housing Finance (HF) announced that it would launch two major housing projects on Thika Road this year, marking the latest real estate development that is seeking to attract more residents along the super highway constructed three years ago.

Frank Ireri, HF chief executive officer, said  the implementation of the two projects would be done through a joint venture agreement.

“The owners will provide the land, we will provide the financing, while our construction unit will develop the houses,” Mr Ireri said.

The groundbreaking for the  two- and three-bedroom apartments at Clayworks on Thika Road will take place in September, while the parcelling of a 183-acre serviced plot scheme in Ruiru (Theta Grove) is expected to begin  in July.

Cytonn Investments’ Business and Market Outlook released early this year showed that the country’s real estate sector will be driven by the middle class’ desire to own homes, and this has been one of the Thika Superhighways’ strengths.

Mr Johnson Denge, Cytonn’s real estate services manager, said that areas that have had massive infrastructure built, like Ruaka, “will see a 4.2 per cent growth, while Thika Road will see a growth of 3.5 per cent in the year.”

Britam is already building 1,100 housing units in Kamiti, Kasarani and on Thika Road. Mid last year, British American Asset Managers’ (BAAM) acting Chief Executive Officer, Jude Anyiko, said that the project would be implemented by HF and the Kenya

Building Society.

“We expect to build 240 units on Kamiti Road in Kahawa by the start of July, 2016 while the construction of another 120 units in Kasarani will be launched in November. The construction of 640 units on Thika Road will begin in August,” Mr Anyiko told

clients during a briefing.


Already, a number of shopping facilities, proposed real estate developments and other social services are coming up that are promising to transform the entire landscape and heighten economic activities in the area.

The increase in the number of proposed multi-billion shilling gated-community estates along the stretch is luring middle-income investors, previously concentrated in Nairobi, to the plains of Ruiru and Juja North towards Thika, where agricultural land is being

converted  into residential estates.

Ms Patricia Githu, the chief executive of Developing Africa, which  put up the Sh3 billion Juja South Estate, said that when they started building the estate, they believed that the easy access facilitated by the highway would be one of their selling points.

“I am happy we have been vindicated. We handed the units to the first lot of home buyers in November. We are soon beginning the second phase,” Ms Githu said.

“We have just concluded the finishing touches to ensure we hand over the apartments and maisonettes in the best condition. I am happy that the inquiries have been steady, but overall, the real estate market

in Nairobi has slowed down since last year. Still, we have received inquiries, mainly from Nairobi and the diaspora,” Ms Githu said.

Upon completion, Juja South Estate is expected to comprise apartments, a shopping mall, a primary school, a clubhouse and a country club. Formerly a vast stretch dotted with coffee plantations, the

landscape in Juja has changed, with various residential estates popping up due to the improved road infrastructure.

Ms Githu said that the main attraction for property investment in this area is the availability of various amenities, compared with other areas within the metropolis, which gives any investor or home seeker the

various amenities like sewerage, roads, water and electricity.

The growth and expansion of real estate along the superhighway is positively impacting on projects in the residential zones adjacent to it, with enquiries, as well as development and land costs, rising.

“For us, the growth and expansion of real estate in Juja has positively impacted on our project as well, in terms of bringing traffic towards Juja to look for housing and investments. Juja has opened up from

the original quiet small town it was to an active business centre, hence the requirement of affordable homes,” Ms Githu said.

Mr Charles Mwangi, a real estate consultant and valuer, says that these projects mark the start of a new wave of both residential and commercial developments in the areas adjoining the super highway.

“The results of these developments have been astronomical price increases for plots along the stretch,” Mr Mwangi said.

The Nairobi property market is currently driven by the middle class, which is seeking real estate investments, which has in turn created an opportunity for developments that cater for their needs.

This middle class demand has led to a higher supply of middle-income housing and growth in a number of suburban retail malls to cater for the market. For instance, Thika Road has in the past two years seen the opening of three new malls, with another one expected later this year in Juja.

Last year, Actis, the UK-based investment firm, opened Garden City Mall to the public. The development, which sits on 32 acres adjacent to Thika Road, will also have a residential unit  comprising 159 apartments and 56 four-bedroom villas.

Mr Festus Kagoe, the chief executive of Ark Realtors, says that the upgrading of Thika Road, coupled with the ongoing expansion of  Outering Road, is expected to bring about massive economic expansion in

the area that will in the near future see the expansion of the Nairobi towards Thika, resulting in  a possible merger.

“Three years after its completion, the superhighway has created more avenues for real estate expansion that is essential in the continued endeavour to satisfy the housing demand. It also provides an opportunity to develop more planned settlements, especially in the  form of housing estates as opposed to the unplanned settlements witnessed in the Nairobi,” Mr Kagoe  says.

Before the road was upgraded, home owners along the highway were charging comparatively lower rents, and even selling homes much cheaper.  But this has changed, with the rise of fairly good houses,

improved infrastructure and access and seeing them charge premiums.

“The risk appetite for the players is now high in this zone. You will pay a high premium for land, a house or rental asking price. It shows that the effects of the infrastructure on property is at its peak. It’s

almost impossible to get land along the highway,” Mr Kagoe said.



Improved access a key attraction for investors

Six years ago, an investment on Thika road did not attract much attention. Apart from its proximity to the city centre, the two-lane road was better known for its traffic jams. Its upgrading, coupled with the

construction of the Eastern and Northern bypasses, has changed the landscape of the area, with ease of access seeing property development balloon.

Patricia Githu, the chief executive of Developing Africa, the developers of Thika Road Estate, says that the market dynamics have seen a transformation, thanks to the infrastructural upgrade.

“From the purchase of houses to vacant plots, a lot has appreciated within this area. For instance, in 2005, a quarter an acre of land within Juja or Ruiru was going for Sh500,000, compared with the current

asking price of Sh6 million,” Ms Githu said.

The Eastern Bypass has also made the daily commute between Embakasi and Thika Road much easier. It also cuts across Thika Road all the way through to Kiambu Road, Limuru Road and back to the

Nairobi-Nakuru highway.

“When we started building our estate, we had in mind how accessible we were. For instance, it would take me longer to access the site when the superhighway wasn’t completed, but this has significantly

changed as I do it in under an hour.

The same story is shared by our clients, who moved into their houses in November last year. They no longer make the hour-long journeys to their places of business. These are but just some of the benefits

the residents of Nairobi and its environs are enjoying from the ongoing construction of roads, by-passes and link roads,” Ms Githu said.

For Ms. Githu, the choice of Juja along the highway also has one of its hidden benefits: The appreciation scale of the property.

“If one is looking at getting their first real estate investment, then those along the highway are the best.

“At the time we started the developments, Thika Road wasn’t what it is today - the idea that the land would appreciate in value and the commute reduced from hours to minutes to access either the Nairobi

central business district or Thika Town is what has made the difference,” Ms Githu said.

The key factor is for one to start from the outskirts of the city and work their way back to the city, since you cannot afford the city precincts for your first property.

Once you get the documents for the property and with the right timings and calculations, you will be able to flip it and use the returns for a second property close to you.

The infrastructural construction has opened up new areas, especially along the new roads, easing daily commuting and raising the value of real estate in the area. 

An eighth of an acre plot located along the Eastern By-pass, which runs from Mombasa Road through Utawala, Ruai, and Thika Road onwards, was priced at an average of Sh300,000 a decade ago, but is

now fetching Sh3 million, following  the opening of the road.

Alex Muema, the managing Director of Ndatani Enterprises, a land trading company, said that the expansion of link roads is also proving a powerful pull for property developers and established retail

entrepreneurs eager to take advantage of the untapped demand.

“Apart from land sales, the asking prices for the houses increase every year. The same is for the asking prices in terms of rent. I have never gone wrong with property. I purchased along these expanded

roads because of the multiplier effect,” said Mr Mwema.