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Property prices push investors to far-flung areas

Thursday May 2 2019


Kamulu Heights on Kangundo Road. It comprises 100 two and three bedroom master en suite bungalows. PHOTO | ERIC WAINAINA | NATION MEDIA GROUP 

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The increasing property value in areas proxy to the city and its immediate outskirts, as well as the infrastructural development by the government in areas considered rural, has seen investors in the real estate sector rush to far areas where huge and affordable land is available.

Housing co-operatives, land buying companies and individuals are buying large tracks of land in areas which were previously shunned for real estate development.

Areas where investors in the sector are flooding after being pushed from the city and its prime outskirts include the interior of Kiambu, Kajiado, Laikipia, Nakuru and Muranga counties.

Their far distance from the city notwithstanding, all these areas are the next frontier for the real estate sector.


For instance, while other areas in the outskirts of Nairobi continued to enjoy unprecedented growth, Ruai, Joska, Kamulu and other areas along Kangundo Road remained stagnated, largely due to lack of infrastructure, which discouraged investors from venturing into the area.


Today, the area has experienced unprecedented growth after investors begun putting up housing projects, both for rental and sale.

Currently, the area, which stretches between Nairobi and Machakos counties, is dotted with maisonettes, bungalows and storey flats. And in almost every corner, more buildings are under construction.

In Ruai, Joska and Kamulu, several hardware establishments selling construction materials have come up, a manifestation of a booming property sector.

For instance, Soil Merchants Limited, a real estate firm with a 10-year experience is putting up a multimillion gated community near Malaa Trading Centre dubbed “Kamulu Heights”, which comprises 100 two and three bedroom master en suite bungalows.


Sammy Kanyoro, the project’s sales manager, said it is being implemented in two phases: the first one comprises 60 units which are already complete and occupied, while the second phase will have 40 units.

Each of the units is meticulously set on an eighth acre plot of land whose features include well-tarmacked access roads, large parking area for three cars and a sizeable compound with lush landscaped gardens.

“Previously, very few people, especially those who commute to the capital, would have thought of settling in Kamulu and its environs because they considered it to be not only far, but also undeveloped compared to other areas like Rongai, Kitengela and Athi River.

"Now, with the construction of Kangundo Road and the skyrocketing of land prices near the city, investors have been lured to the area, leading to an increase in land prices,” Kanyoro said.


The area along Kenyatta Road that leads to President Uhuru Kenyatta’s rural home Ichaweri, in Gatundu South, Kiambu County, has also become the next destination for real estate development, as investors in the booming sector scramble for available land to put up gated communities and high-end hotels.

For a long time, the area that is off Thika Superhighway had been deemed too rural for such projects, even as other areas along the busy road continued to experience growth.

Unlike most areas in the outskirts of the city, Kenyatta Road area is still available and affordable, with individuals purchasing plots and putting up homes and rental apartments, and this has given the area that was previously characterised by unkempt bushes and farms a face lift.

Some of the projects that are already in place include Oak Park Estate by Banda Homes, Cornerstone One, Three and Four, Brick Stone Garden Estate, Kenyatta Road Estate, Red Wood and Hard Rock Park Estate.

Others are Olive Estate, Pine Wood Estate and Rose Wood, while hospitality facilities include The New Rain, a multimillion high-end hotel associated with Energy Principal Secretary Joseph Njoroge, and recently built Theta Hotel, which is associated with Kenyatta Family, among other establishments.


According to Fabian Ndivo, the Chief Executive Officer of Banda Homes, they were lured to the area by its proximity to the city that is created by Thika Superhighway, which makes it possible for one to get to the central business district in less than one hour when there is not traffic.

Further, he said they were encouraged by the availability of land, noting that they will be working on more projects in the area after all the units at Oak Park Estate were sold out and handed over to their respective owners.

“Kenyatta Road is the next frontier as far as real estate is concerned, because there is availability of land which is affordable, and this enables the developer to sell the units at [a] relatively affordable cost and still make profit. Additionally, it’s possible for someone to work in Nairobi and live along Kenyatta Road,” Ndivo said.

Cornerstone One, Three and Four and Brick Stone estates are gated communities run by Mahiga Homes Ltd, a real estate firm that has implemented projects in Kiambu, Machakos and Kajiado counties consisting of over 200 units.

The projects, within which each house has its own title deed for a 40x80 plot, are located near Kimunyu Trading Centre, about 10 minutes’ drive from Thika Superhighway, and only 200 metres off the tarmac.


Kamuthi Housing Cooperative Society has proposed a Sh1.8 billion Buffalo Hills and Golf village, a gated community project at Kilimambogo in Thika East, an area far removed from the city.

The project is designed to have 750 homes standing on a quarter and half acre piece each, on a total of 355 acres and nine-hole golf-course that covers an area of 108 acres.

Bernard Maina, the society's chairman, said buyers are no longer considering the proximity to cities or towns, but accessibility, adding that the more estates come up, the faster the improvement of infrastructure in those areas.

“People are not caring where the land is so long as it is affordable and accessible. This means that any time a development begins, they know that all amenities will get fixed,” Maina said.

Another area that is reaping from the overflow in the city is semi-arid Ndeiya, which straddles Kikuyu and Limuru sub-counties. This area had remained largely undeveloped, despite having vast tracts of land.


The face of this area is rapidly transforming, especially after the commissioning of the tarmacking of the Thogoto-Mutarakwa-Limuru Road, which cuts through the area and links it with the main Nakuru highway.

Now, investors are flocking in to buy land and build palatial homes, giving it a major facelift.

This has led to a sharp and steady increase in land prices, with plots that went for between Sh300,000 and Sh800,000 five years ago now going for between Sh2 million and Sh4.5 million, depending on the location.

Karai, a ward located few kilometres from Kikuyu town, has seen its Rio Nderi, Thogoto, Ruthigiti, Kamangu and Maya-ihii villages get new residents, who have bought and built houses.

For instance at Rio Nderi, there is an area named “Nairobi Ndogo”, and according to the area ward representative Samuel Mugwanja, it got the name because the newly built residential houses resemble those in Nairobi’s high-end suburbs.

“Since 2014, people have been settling in this area, because with good roads getting to Nairobi takes a very short time,” Mugwanja said.

In that area, he says, a plot measuring 100x100 metres was going for less than Sh1 million before 2014. “Now, a plot that size is going for up to Sh1 million, and the prices are still going up,” he added.


Kajiado has also been a destination for real estate. And investors having exhausted land near towns, they are now deep into the interior.

For example, Kapiti Plains in Kajiado County, which is off Mombasa Road, that has for a long time been dotted with acacia trees, was pasture land for cattle.

Today, it is an attractive area to real estate players, thanks to the construction of the standard gauge railway (SGR) and the planned Konza-Isinya/Kitengela Bypass.

Since the launch of the SGR, land buying companies, co-operative societies, self-help groups, corporations, learning institutions and individuals have all been scrambling for land in the area, with a view to building and settling there, or for speculation purposes.

KCA University and Stima Sacco are among entities which have acquired land in Kapiti Plains, which borders Machakos County and the fast-growing Kitengela to the East, with locals saying that the price of an acre has risen from Sh400,000 to more than Sh3.5 million, depending on the location.


Joseph Ndichu from Ngecha in Limuru, Kiambu County, recently acquired a plot in Tinga, in Kajiado, over 100 kilometres from Nairobi, en route to Magadi, through a land buying firm that sold 300 acres of land to over 600 buyers.

Ndichu says when he bought the land, distance was not a concern, noting that with the trend in the real estate sector, he anticipates that the value will soon appreciate.

He spent about Sh80,000 on the eighth acre plot but the value has since gone up to Sh200,000.

“Many people wondered why I decided to buy the land last year. They thought I was wasting money but today, they have been accompanying me any time I am visiting the area, with the hope of acquiring a plot or two,” Ndichu told DN2.


John Mwaniki, the director of Jekmas Services, a real estate firm with interests in Kiambu and Nairobi, said it should not come as a surprise that real estate is thriving even in areas that were considered as rural.

He said that availability of affordable land and infrastructure development is all what real estate industry needs to thrive, noting that distance is no longer a matter of concern to potential homeowners.

“With good roads and other amenities, real estate players will definitely camp in an area they previously shunned. Housing projects will definitely attract other developments, including businesses which will give an area unprecedented growth,” Mwaniki said.