Kiambu County’s real estate rush

Properties in Thika, categorised as Nairobi’s Zone C, recorded the country’s highest percentage increase in sales last year at 22 per cent. Photo/FILE  NATION, By IMMACULATE WIRIMU

 

 In Summary

• A large number of investors of Chinese origin have recently bought property in Thika Greens. There is also the flexible option of buying a completed home or acquiring land to build a house in progressive steps over time.
• Pepsi Company will also establish a Sh2.4 billion bottling plant, and a European furniture chain IKEA. Several residential projects like Tatu City, Migaa, Buffalo hills, Juja south, Bahati ridge, Thika Green to mention a few, have also been inspired by the eight lane highway, along the once very busy Nairobi-Thika road.

Increased buyer activity in developments in the outskirts of Nairobi has seen a rise in developer interest, with now more than five multi-million real estate projects coming up in Thika, a town synonymous with industrial and agricultural activities.

Properties in Thika, categorised as Nairobi’s Zone C, recorded the country’s highest percentage increase in sales last year at 22 per cent.

The average sale price moved from Sh7.8 million in 2011 to Sh9.5 million in 2012. This is compared to the nearly flat pricing in the previously frenetic zones A and B suburbs.

“These are areas such as Westlands, Lavington, Riverside, Kilimani, Karen, Gigiri, Spring Valley, Lower Kabete, Hillview Estate, Kitisuru, Loresho, Runda, and Komarock, where sale prices rose between one and two per cent in 2012, according to the Hass Consult property index,” says Mr Charles Kibiru, the chief executive officer of Thika Greens development.

“The surge is largely due to increased interest in the affordable lifestyle integrated in golf cities,” says Mr Kibiru. People want to live in high-income residential estates such as those coming up in Nairobi, but their cost is three times higher than in developments in the outskirts such as Thika Greens.

A Sh35 million three-bedroom house in Runda would go for Sh16 million in Thika and a Sh30 million home in Westlands area would cost a Sh10 million in Thika.

A quarter-acre serviced plot near the golf course now costs up to Sh10 million compared to Sh5 million two years ago. In the new developments in and around Thika, 80 per cent of the investors are local residents, 10 to 15 per cent are from the diaspora, and five per cent are foreigners.

A large number of investors of Chinese origin have recently bought property in Thika Greens. There is also the flexible option of buying a completed home or acquiring land to build a house in progressive steps over time.

Cheaper option

In an interview with a local television show, Bahati Ridge’s managing director, Mr Gilbert Kibe, said property in Thika that is now selling at a range of between Sh30 million and Sh35 million will have risen within a year to a scale of between Sh50 million and Sh55 million. He states that, property in Thika in a year or so, will compare in value with that in Nairobi, though adding that a home in Thika will have better aesthetics because congestion and pollution are reduced.

A Kenya National Bureau of Statistics report of 2012 says that in 2008 real estate contributed Sh107,323,000 to the country’s gross domestic product. In 2009, the contribution was Sh116,657,000. The following year it was Sh123,173,000 and Sh134,746,000 in 2011.

The latest development along Thika road is the Garden City development. A project by London-based private equity firm Actis, it is expected to invest in a 130,000m² mixed use development which will host a 50,000m² retail mall expected to be the largest in East Africa.

The Garden City development — worth Sh27 billion — will accommodate state-of-the-art commercial premises, 500 new homes, and a central park. It will offer a rare opportunity to create a large-scale development to directly serve the needs of Kenyan businesses, homeowners, and shoppers.

The project is expected to attract more foreign retailers to the Kenyan market. Garden City is likely to send prices skyrocketing in neighbouring areas. Other firms that have eyed investments along the highway include supermarket chains like Uchumi and Nakumatt.

Pepsi Company will also establish a Sh2.4 billion bottling plant, and a European furniture chain IKEA. Several residential projects like Tatu City, Migaa, Buffalo hills, Juja south, Bahati ridge, Thika Green to mention a few, have also been inspired by the eight lane highway, along the once very busy Nairobi-Thika road.

Ruiru, another town along the Highway in Kiambu County, is synonymous with the proposed Tatu city, and is expected to grow tremendously because of other upcoming real estate projects.

The town is located within three kilometers of the city’s boundary, and is connected by road and rail. It covers an area of 292km² and a large number of coffee plantations surround it.

This is a big industrial town with major factories in such as Spinners & Spinners Garment Factory, Devki Steel Mills, and Ruiru Feeds among others. The place is currently harvesting from a housing boom from the many coffee estates being converted into residential areas.