The Nairobi skyline is changing fast as international hotel brands and corporate firms construct their bases in Kenya. Over the past few years, and riding on the success of Kenya’s financial and telecommunications sectors, banks, telcos and insurance companies have been constructing multi-storey buildings that serve as their headquarters in the country.
One man behind some of these property developments is Edward Kirathe, the founder and CEO of Acorn Group. The real estate group of companies offers varied services in project management, construction, property development and trading.
Kirathe told How we made it in Africa that clients in East Africa’s property market are no longer interested in just four walls.
“The companies we work with are largely indigenous companies, but they have raised the bar. People’s expectations are growing. It has to do with travel, education and seeing what other people are doing. The aspirations of our clients are changing on a daily basis.”
Kirathe, who quit his job at a leading architectural firm in Kenya to pursue property development, said he has a passion for real estate and changing environments.
“I like changing environments. The projects that we do are unique in one sense; we have to leave a place better than we found it. We look at things that are beautiful, things that are excellent [and] things that will inspire others. The built environment can be very inspirational.”
Kirathe’s out-the-box thinking is inspired by his many travels across Europe where he saw unique designs and construction.
“I love to find an old dilapidated building and create something that makes people go ‘wow’,” said Kirathe. “There is good money to be made in real estate; there is no doubt about that. But it is not just about money. [For me], it is about changing this environment.”
Acorn Group has been involved in multi-million dollar projects in Kenya and neighbouring East African countries.
“We work for all the major insurance companies in East Africa. When they have a development to do, they contract us to manage the project for them. We also construct our own buildings.”
According to Kirathe, the demand for commercial and residential real estate is growing across Africa.
“Our client is seeing very huge demand for their new 15 storey office development [in South Sudan]. That demand is not just in Juba, it is across Africa.”
Acorn Group is keen to drive the redevelopment of African cities and has begun expanding across the region with its clients.
“What is the biggest issue cities in Africa face as we urbanise? It is what we call urban sprawling: the establishment of unplanned, unstructured and unserviced developments. It promotes social ills and does not build a healthy return even as an investment. The redevelopment of our cities is critical. Acorn wants to play a role in the regeneration of Africa.”
Kirathe attributed the success of his business to the talented team of employees at Acorn Group.
“We have excellent people. The majority of people who work at Acorn are below 35. They are talented, very ambitious youth who are eager to learn. What you see here is a creation of people.”
Offering quality service, he said, has also helped the company stand out in the midst of competition.
“In this business you’ve got to have integrity. People must be able to trust you. You must also produce beautiful things, things people want. When we did the Coca Cola East & Central Africa office headquarters in Nairobi, everybody came to us,” said Kirathe. “At the end of the day what differentiates Acorn is the quality of the projects we do. It has got to be beautiful, environmentally, aesthetically and economically.”
One of the biggest challenges Acorn Group faces is access to land.
“Accessibility to good serviced land is not easy. The ownership of land is also crucial given the historical issues around land in this country. For a developer that is your primary ingredient. If there are issues there, you are going to have difficulties.”
He noted that obtaining statutory approvals is also challenging, but this has improved over the years.
“A few years ago to submit your drawings for approval you did it in a very haphazard manual system. Today it is online, automated and it is working every well. It is still a challenge but not as big as it was before.”
Kirathe said passion is critical for the success of any business venture. It is what keeps entrepreneurs “going when things get tough and all those around them run for the hills”.
“[Passion] is what is left when everything else is collapsing around you. That is why you see entrepreneurs who start something, it fails, and they go back and start again. That is the very definition of entrepreneurship,” said Kirathe. “Entrepreneurs are average guys who just kept going till they get their breakthrough.”
Kirathe cited his own experience when he quit his job at a leading architectural firm to pursue his passion for property development.
“When I left employment in 2001 Kenya grew as a country at -1.7%. It is the only year since independence that Kenya’s economy shrunk. Everybody was asking why I was quitting my job at such a difficult time when the economy was shrinking and an election was coming the next year. You just have to believe in what you want to do. Most of the time no else will see it. Often times it is not rational,” he added.
Kirathe faulted perceptions held by society about entrepreneurship.
“Entrepreneurship is not landing one big idea and getting it going. Those are one offs; there are very few great ideas that ever become successful businesses. What happens is just determined people who work hard and continue learning and refining their idea.”
Kirathe said his journey in business for the last years 11 has been a learning process that he would not want to change.
“How do you learn how to choose the right partners? It is sometimes getting them wrong. Today I can tell you it is easier for me to choose a partner and that is critical for me because every time we go into development we are working with all manner of partners and counterparty risk is your biggest risk. That ability to know this is not the right partner after one hour having coffee with someone is a critical thing in business.”
Kirathe argued that running your own business can be very challenging and often entrepreneurs contemplate quitting.
“There are seasons and times you feel like maybe I should quit. You face issues and wonder whether you should just move to something else,” he said. “That is what people don’t understand. They think entrepreneurs are these super humans who never feel like giving up. Truth is, we go through that all the time. It is your determination that makes you wake up and fight another day until you crack through the challenge you are facing and later on it looks like it was so easy.”
Kirathe added that to be a successful entrepreneur, one must persevere.
“This may be a word you will probably hear again and again, but the reality is that often times you are seeing a vision and not everybody is seeing it. There are so many hurdles that you will come across and unless you can persevere, you will not make it.”