US investors eye Kenya real estate

November 6, 2009
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, NAIROBI, Kenya, Nov 6 – A group of American real estate investors are in Kenya scouting for land to invest about Sh22 billion for low-cost housing units.

The President of Harambee Heritage Kenyon Atlee on Thursday said the group also intended to put up a steel manufacturing plant in Nairobi to facilitate production of steel to be used in the construction rather than importing it.

“We will be looking at 4,000 to 5,000 units in our planned unit development consisting of housing and commercial units, a school and a medical facility with amenities. The metal plant itself will probably cost us Sh44 billion depending on the location, cost of land and other factors that we are investigating while we are here,” he stated.
 
He made the revelations at a meeting with Housing Assistant Minister Margaret Wanjiru who said the proposed building code would control foreign real estate investment in Kenya and prevent future distortions in house prices.

“We have already introduced the new building code which we have forwarded for review and once it is passed in Parliament it will make our operations easier. However until we get there we can only sit in the boardroom and come up with a memorandum of agreement with investors so as to avoid the situation like it was between last year and half way this year,” she explained.

Ms Wanjiru also questioned the investors’ ability to complete their proposed project saying Kenya was tired of investors who committed themselves to projects only to leave them half way done and demanded a sketch plans for the construction.

“Our major concern as a ministry that is charged with the responsibility of housing is the ability for you to start and finish your work. We always meet developers who are usually very excited about the housing industry. They want to invest; they have brilliant ideas but do they have the capacity to begin and finish? We as government are tired of projects that keep stalling and I am not sure we will have a starting point if we do not have a finishing line,” she said. 

Ms Wanjiru added that houses were in great demand in Kenya adding that the government had so far been unable to adequately provide housing for its citizens.

“Right now the demand for housing is very high because even we as government have not been able to supply all that is needed. We are not even close and have not even gone 50 percent in providing housing for Kenyans. So the opportunities are there for investors as well as government,” she said.

She also held that the government was charged with the responsibility of ensuring a conducive business environment for investors.

“They are not asking the Kenyan government for money; they are not asking for free land but they are asking it to create a favorable atmosphere to operate in and fulfill their investment plans. This will also assist us meet the housing demand at affordable prices,” she stated.

Mr Atlee explained that the construction of the housing units would be using the stucco technology and would not require much timber. He also explained that the houses would only use shallow foundation thereby hastening the construction period and still maintain quality.

“We will use a new technology which uses light weight metals. One of its advantages is that it does not require the typical deep footers that you use in Kenya with stone construction. The fact that the metals are not heavy means we do not have to dig a very deep foundation and therefore save time. In addition this method does not take up a lot of construction material,” he explained.

He added the company would also use local man power to bring up the housing units so as to promote employment in the country.

“The idea is to bring a small team from America and invest in your country to transfer the technology in our light weight metal framing to utilise the local talent and your engineers and train the Kenyans to bring up these buildings,” he observed.

He also stated that Kenya would benefit from a reforestation programme that the group would introduce in Kenya and allow the country to engage in carbon trading.

“The last is the reforestation project that would ultimately produce carbon credits for the country,” he held.

Stucco is a form of plaster that is normally used as a finish in America, but could also act as cement in construction of light houses.

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