In the last five years several multi-million dollar gated communities and golf estate projects have emerged in Kenya. Last month the Aberdare Hills Golf Resort was launched, promising to be the first five star golf resort city in East Africa.
In an interview, the project’s chief development officer, Rod Taylor, told How we made it in Africa’s Dinfin Mulupi more about the development.
There are several other golf estate projects in Kenya. What does Aberdare Hills bring to the mix?
Aberdare Hills is exclusive in design, location and conceptualisation. We have contracted the top designers in the world, WATG, [a] leading designer of upmarket and exclusive destinations, and this makes Aberdare Hills one of Africa’s most prestigious and secluded properties. We are constructing on 1,700 acres in Naivasha, one of the most beautiful tourist destinations in the country. The project is unique in the region, as it’s setting new standards in course design and construction. Ours is more than a golf resort; we are looking at commercial, retail, leisure and healthcare and assisted living. We are probably the largest of those types of projects in Kenya. You can’t really put us in the same bracket with the rest. The project is going to take two years to build the first homes. The entire project will be complete in about six years. We are not just selling homes; our aim is to create a market leading project that has not been seen in this country.
Is there a market for all these gated and golf estate projects?
Yes. It is market driven. The middle class of this country has been growing significantly. Everybody here is aspirational; they want to have nice clothes, drive the best cars and eat at the top restaurants. Kenya doesn’t have all of that today, but they will over the next five years. People want to go and live in a home that is safe, has been built [on] international standards and has got [an] international community feel about it. You also want to be able to drive out of your home, two miles down the road into a shopping mall. There aren’t too many places here today that can give you that.
The price of property is quite high in Kenyan urban centres and the mortgage market is very small. How are potential buyers likely to pay for these new units?
The interest rates offered by commercial banks today are quite high… thus making [mortgages] unattractive to many borrowers. Interest rates will have to come down over the next two years. Kenya has just come out of a peaceful election and there are multinationals coming in quick and fast. More people will be in a position to buy in coming years. Kenyans in the diaspora are also driving the market as they are getting loans at lower interest rates abroad.
We will readjust our prices downwards if need be. We have to be driven by the market. I think the market will mature in terms of price in the next three years because people are exposed to far more options. I can build my project for a lot less than I am spending but I would have to use local tiles, and taps from China. We are bringing in pipes from Turkey… and taps from not Africa or China, but places like Switzerland.
Describe the challenges you face.
Educating the buyers and the market on our differentiation is a huge challenge. We face scepticism; we have to educate them why our project is exemplary. There are too many sub-standard and poor quality projects in the market. Most of the real estate projects here seem to be built quickly without attention to detail and buyers go in and they spend their very hard earned money correcting the mistakes that the contractors made.
Building a project of this size is also a challenge by itself; getting the raw materials that we need, getting the consultants, and getting people who understand how to do these projects is a challenge. There are few projects in the region that are of this scale and calibre and therefore you don’t get the true international quality. We have sourced for an on-site test lab to help us ensure quality, durability and safety of our homes by making sure the concrete is perfectly mixed.
What are your future plans?
We have plans to export the concept across East Africa and beyond after successfully working on Aberdare Hills Golf Resort. Kenya hasn’t exported a project to Tanzania or to Uganda. Imagine taking our project and saying “this is built by Kenyans and now we are moving it to the region”. That is what I would like to see.
Any advice for foreign investors eyeing the Kenyan property market?
I would advise them to invest in places where tourism is vibrant; where tourism rentals can easily drive yields for their property since the tourism sector is thriving… with the current efforts of expanding tourism products beyond safaris to include concepts like golf tourism, these areas are more promising. Also, areas where infrastructure development is opening up new investment opportunities are promising high yields.
I would also encourage them to put up market driven projects. Kenya’s housing sector offers great investment opportunities… Kenyans in the diaspora and multinationals setting foot in Africa via Nairobi are driving demand for the high-end market.