Developers target low-cost home buyers on Mombasa Road

IN SUMMARY

·         Rogam Investments, Karibu Homes and Peninsula Development offer Sh1 million houses.

·         The developers are pitching to buyers that the monthly mortgage payments for the units are equivalent to their current rent.

By JOHN GACHIRI, jgachiri@ke.nationmedia.com

Three real estate developers are building low-cost houses along Mombasa Road targeting first-time buyers with prices starting at Sh1 million per unit.

The developers — Rogam Investments, Karibu Homes and Peninsula Development Company — are pitching to buyers that the monthly mortgage payments for the units are equivalent to their current rent.

At an interest rate of 15 per cent per year, a Sh1 million house would require Sh12,000 a month for a 20-year mortgage while a Sh2.5 million house would require Sh31,000 a month at the same interest over a similar period.

Rogam Investments is undertaking the project as a mixed development of studios and apartments in Mlolongo, Machakos County. The project, dubbed First Homes, has a sale value of Sh500 million.

The firm said that it was aiming at attracting first-time home buyers such as working recent graduates.

Mr Aaron Gitonga, a director at Rogam Investments, said the firm chose to serve the low-end market because it is under-served unlike the high-end one which has signs of saturation.

“This is a market where there is a lot of demand but not many developers are looking at it,” Mr Gitonga told the Business Daily.

First Homes has studio apartments that go for between Sh1.5 million and Sh2.7 million, one-bedroom units at Sh2.5 million and two-bedroom ones at Sh3.6 million.

Rogam Investment began building homes in January last year and the first ones are expected to be ready for occupation by September.

The firm is financing the project through a mix of equity and loan from Co-operative Bank.

Availability of less costly, large tracts of land is the main reason attracting developers to Mlolongo and neighbouring Athi River towns. A large pool of employees from factories and offices along Mombasa Road and the Export Processing Zone is another reason.

Karibu Homes is putting up a Sh3 billion estate in Athi River. The apartments are priced at between Sh1.6 million and Sh5.25 million. The estate will have 1,082 units.

Peninsula Development Company plans to roll out apartment blocks worth Sh1.5 billion by the end of this year targeting first-time home buyers with units costing from Sh1 million. 
The firm has a mixed development in Mlolongo and another one on Ngong Road, also targeting first-time buyers.
Mr Gitonga said that land prices are the biggest barrier to putting up more low cost units. “The price of land should be less than 10 per cent of the total construction cost,” said Mr Gitonga. Currently the price is about 25 per cent of the overall cost of a project. 
Property consultants say that land prices are still on the rise in most satellite towns.

http://www.businessdailyafrica.com/Developers-target-low-cost-home-buyers-on-Mombasa-Road/-/539552/2798810/-/lgwse0z/-/index.html

Foreign billionaire investors seek a slice of Kenya

By Sheila  Kimani

The thriving real estate sector is attracting foreign investors from across the world as they seek to capitalise on the country’s strategic location as a regional business hub. Mukesh Ambani When Delta Corp sold two prime properties in Nairobi, few people connected it to India’s richest businessman, Mukesh Ambani. The 53-year-old tycoon made Sh2.5 billion from the deal in Kenya in which he sold Delta Centre in Upper Hill to the World Bank and Delta Towers in Westlands to University of Nairobi Staff P
ension Scheme and PricewaterhouseCoopers. Ambani has been slowly upping his interest in East Africa, with his company, Reliance Industries, working alongside the Delta Corp East Africa Limited. In mid-2013, Business Daily reported that he had acquired ten prime plots in Nairobi valued at Sh2.9 billion that are to be used for commercial and residential development. In February 2014, the same paper reported that Mukesh Ambani had reported another gain of Sh189 million from part-sale of his Kenyan real estate holdings.  A month earlier, Delta Corp chief finance officer Hardik Dhebar was quoted as saying that real estate projects in Kenya had returned Sh2billion profit.

Aliko Dangote Coming to Kenya in the entourage of Nigeria’s former president Goodluck Jonathan in 2013,  Aliko Dangote felt certain that in three years, his company would be one of the dominant cement producers in Kenya. He revealed plans to build a $400 million cement plant. “We have realised that if we really want to do something big in East Africa, we must operate in Kenya. We believe that in the next two and half years, we will be the dominant player in cement in Kenya,” Forbes quoted him saying at the time. With the likes of Bamburi Cement and Athi River Mining already holding the largest market share, he knew it would not be easy for him to penetrate the Kenyan market. However, owing to his reputable Dangote Cement business, which is the largest cement manufacturer in Africa with stakes in nine African countries like Tanzania and Ethiopia, there was a chance that his entry into the Kenyan market would be a game-changer.Two years on, the cement plant is yet to be as it faces opposition from different quarters.

Adil Popat has worked in different sectors like motor vehicles and hospitality. His interests in the hospitality sector saw him work with top franchise Kempinski to bring business travel and luxury to Kenya, in the form of Villa Rosa Kempinksi. Years after working with top hospitality brands like the Hilton Hotel, witnessing how other top brands had succeeded in Kenya and even starting his own hotel franchise — Ocean Basket — Popat’s partnership saw a transformation in the Kenyan hospitality industry. Apart from Villa Rosa Kempinski, his firm’s focus has seen him expand under the Acacia brand to Acacia Premier Kisumu, a four-star hotel located in the leafy Milimani suburb and offers views of Lake Victoria, the 168-room Acacia Premier Nairobi, as well as many other investments that run into millions of shillings.

Richard Branson Owing to the Maasai Mara’s wildebeest migration that made it the Seventh Wonder of the World, Virgin Atlantic’s billionaire CEO Richard Branson chose to invest in Kenya’s tourism, specialising in luxury camps. With an already buzzing airline company, Sir Branson proudly announced that he would be opening a luxury game camp next to the Maasai Mara Game Park as it would be in line with the tourism and travel industry. Yet again, this would be a familiar venture given his South African reserve that has been in business for over 20 years. Following in the footsteps of his Ulusaba private game reserve located in the Sabi Sands in South Africa, the Kenyan luxury safari camp dubbed Mahali Mzuri boasts a 15-tent luxury camp whose rates are about $590 (Sh50,740) per person per night.

Read more at: http://www.standardmedia.co.ke/lifestyle/article/2000166060/foreign-billionaire-investors-seek-a-slice-of-kenya?pageNo=2

Kenya: What the Law Says About Property Ownership

Property in Kenya can take many forms. It can be movable or immovable. Article 260 of The Constitution provides that "property" includes any vested or contingent right to, or interest

in or arising from--

(a) land, or permanent fixtures on, or improvements to, land;

(b) goods or personal property;

(c) intellectual property; or

(d) money, choses in action or negotiable instruments;

As such property never floats around without an owner. The owner can be a person or a group. It's no wonder we have documents that are used as proof of ownership of property like log books, title deeds and so on.

When alive, land is usually registered in the names of real or juristic persons.

The Constitution extends a protection and a guarantee of right to own land under Article 40. (1) Subject to provides that every person has the right, either individually or in association with others, to acquire and own property--

(a) of any description; and

(b) in any part of Kenya.

Property can be owned by spouses jointly or separately. The fact that property is registered in the name of one spouse does not mean that it is owned exclusively by one spouse. The Matrimonial Property Act provides that a spouse shall at all times have an overriding interest in matrimonial property. The spouse in whose name the property is registered is deemed to hold the property in trust for the other spouse.

The right over property comes to an end upon the demise of the person in whose name it is registered. A dead person cannot own land.

The law of Succession Act regulates the process that the ownership of property is expected to flow through from the deceased to the living. The change of the ownership from the deceased to the living is done through wills in case the deceased had prepared one.

Such a person is said to have died testate. The person who makes a will is known as the testator. The distribution or the general handling of the property they leave behind is regulated by the wishes that testator had expressed in their will. The Testator has to appoint a person known as the executor who will be tasked with the responsibility of implementing the desires of the testator.

Majority of us Kenyans, do not prepare wills. In the event that one dies leaving no will behind, then the Law of Succession Act provides that such a person has died intestate. In the event the deceased had property, then the person who is recognised by the law of succession as eligible must apply for letters of administration. The property left behind by the deceased is known as the estate.

In Kenya, dealing with the property of the deceased without letters of administration is illegal/a court order. Many people dispose of, distribute, and transfer the property of the departed loved ones without letters of administration out of ignorance. This is known as intermeddling.

Letters of administration are court orders that appoint an administrator who stands in for the deceased for purposes of collating the assets, liabilities, debts owed by /owed to the deceased. He has the task of paying off debts and distributing the property left behind by the deceased to the beneficiaries.

It must be noted that the administrator so appointed by the court is not the new owner of the property of the deceased. The administrator has to report back to the court that he has completed the task of distributing the estate of the deceased.

The letters of administration granted by the court can be challenged by an aggrieved party who can even apply to the court for the revocation of the grant. This happens for example when the there is a conflict of interest between the administrators role and the beneficiaries or where the administrator is mismanaging the estate or is incapable of rendering an account of the activities of the estate.

The death of administrator does not bring closure to the process. A new one can be appointed by the court to complete the tasks that are pending. An administrator who is incapable of performing his duties can be substituted with another one.

Always remember that it is illegal to deal with the property of a deceased person unless you have a court order. Ignorance of the law is not and will never become an excuse.

By John Chigiti
http://allafrica.com/stories/201501071253.html