OPINION: Challenges to real estate developers in the wake of COVID-19 pandemic
Published on: July 26, 2021 07:00 (EAT)
By Michael Warui The COVID-19 pandemic has presented to real estate developers with a slew of challenges as well as an unprecedented pool of opportunities to provide affordable and innovative housing options to Kenyan consumers. These prospects should however consider consumer price sensitivity while delivering quality and safe housing options. As more people work from home, emerging opportunities translate to homebuyers starting to identify suitable housing options in safe and easy-to-access locations. For instance, in Nairobi, this should be in close proximity to the Central Business District (CBD) and peri-urban locations such as Westlands, Karen and Kikuyu. In Kiambu County, for instance, developer Storehomes is charting a similar path to quality homes through Liza Heights Apartments situated in Kinoo 87, which has a population of 292,000 residents according to the 2017 Kiambu County Integrated Development Plan. Since 2016, the project has created sixty-four new homes, generated employment opportunities for hundreds of local residents, and introduced modern environmental technologies such as the Johkasou waste water treatment plant from Japan that allows for safe and hygienic sanitation. But it is time for a grander vision that brings together a multiplicity of players so that the lone oasis of a single developer burgeons to being a modern peri-urban town. Multiple developers need to work with county governments to deliver sound urban planning and sophisticated neighborhood design where proper sewerage and roads, schools and education facilities, clinics and hospital services, and recreational parks and fitness/sports complexes form part of an integrated masterplan. Support that is needed from the national government includes the speedy completion of highways such as the Waiyaki Way for road infrastructure. Perhaps a less frequently raised objection is the preference that the government gives to foreign developers who are able to access inexpensive loan facilities from their home country financial institutions. A level playing ground should be made a priority to enable local developers to compete on fair terms and to ensure that real estate development proceeds are largely retained in Kenya and that the national economy benefits. Finally, the interest rate regime on mortgages needs a re-examination and the national government can lead this effort to explore how more Kenyans can afford home ownership through inexpensive mortgage facilities. County governments also need to embrace the possibilities of the future and bring stakeholders together to begin building a credible masterplan. The local government will need to explore how to bring their own investments to support efforts from the private sector. The writer, Michael Warui, is the co- founder of Storehomes Holdings Company Limited.