Gated communities and golf estates are gaining popularity in Kenya, with thousands of acres earmarked for multi-million dollar projects that are expected to transform otherwise sleepy agricultural towns surrounding the capital Nairobi into ‘mini-cities’.[hidepost=9][/hidepost]
Thika Greens Ltd (TGL), one of the pioneers of the concept, is turning a dream into reality with the transformation of 1,706 acres of farmland into a golf estate that will have an estimated 4,000 housing units. How we made it in Africa‘s Dinfin Mulupi caught up with TGL’s co-founder and CEO, Charles Kibiru, to find out how the project is coming along.
How is work on the Thika Greens project progressing?
The project is going on. Phase one is completely sold out – 960 plots. About 30 homes are currently under construction, while eight people are living there. We have completed the infrastructure and the establishment of all facilities needed. We expect about 200 homes to be constructed this year. Most buyers are middle class, specifically senior managers and entrepreneurs. They are mostly attracted by the environment and lifestyle that a gated community offers. These are people who want to live in Lavington and Kileleshwa (high-income residential estates in Nairobi), but the cost is three times higher than in Thika Greens where they will spend about US$115,000 to own a large home. Most of the buyers pay cash with only 20% borrowing from financial institutions. This proves that a well packaged product will always sell in Kenya.
In phase two and three we have sold 50% of the plots and some are under construction. The golf course is 85% done and should be ready in six months. Building a golf course to international standards is not easy or cheap. That is why it has taken time. In five years, the $690 million worth project should be complete. The Thika Greens golf estate will have an 18-hole championship golf course, private members’ clubhouse that is also open to non-residents, five and three star hotels, an office park, a world class shopping mall, community centre, retirement village, schools, a hospital and a police station. The estate will improve the captive market for agricultural produce and create about 6,000 jobs. We are forming the basis of a success story on how one can build a satellite town. We are setting standards and following behind the steps of South Africa and Dubai in forming satellite estates and suburbs.
Thika Greens sits on land that was previously a coffee farm. Many other gated and golf estates are also under construction in Thika and in other agricultural towns. What happens to food security?
The government needs to develop a policy and probably zone areas. This is a capitalist market and people are going for returns. If you farm coffee and you are not getting returns and there is an alternative, [then] you will go for it. Real estate and the golf estates is the ‘in’ thing. There is money to be made there. For instance, we bought the land from Othaya Farmers Cooperative Society for $10 million, yet they had earned nothing from coffee for many years. What we need is mechanised farming. You don’t need huge tracts of land to produce food. We just need to maximise on returns.
There are several ongoing golf estate projects in Kenya. How are you coping with the competition?
This is the ‘me too’ syndrome Kenyans have. We just need someone to show us something then we will all do it. I hope people are getting their numbers right. It is an expensive project. It is not for quick returns, you have to think long-term. I don’t look at the other projects as competition. For instance, I would want Tatu City (a neighbouring 2,400 acre project that will house 70,000 people) to come up. If they bring the Central Business District (CBD) to Ruiru, it helps to decongest the Nairobi CBD and improves the profile of Thika Greens. These projects also help build our economy and if anything, the market is large. All we need is to compete on differentiation. China has over 700 golf courses and some of them are estates. The golf estate living should be the ‘in’ thing for Kenya now.
Describe some of the challenges you have faced in developing this project?
Developing a golf course requires knowledge and expertise that we do not have in Kenya. We have had to look outside the country, especially in South Africa and China. This then presents challenges, especially with language barriers thus delaying the project. We also faced troubles convincing Kenyans that we are not another pyramid scheme and that is why we have to keep the promise. Other challenges are licensing and high interest rates.
What do you attribute your success in business to?
Money has never been my motivating factor. Profits are just a by-product. I want to leave a legacy; the psychic income drives me more than money. That does not mean that I don’t work towards maximising shareholders return. I would also say focus and a bit of benevolence dictatorship. If you always work through consensus you may end up with paralysis. It is a question of making decisions and moving on. A good entrepreneur should be able to listen and pick [up on] what sells and what doesn’t. Having an understanding board and shareholders has also been helpful. Fusion of ideas has also helped to propel Thika Greens.
Entrepreneurship is not a walk in the park. Have you ever thought of quitting?
I cannot; 49 Kenyans gave me $5.7 million without a receipt. How do I run away? I have an obligation to them. This is my baby. I was the dreamer and I have to live the dream.
What’s next after Thika Greens?
I am pursuing my second Masters and completing my course work in PhD. In the next one year I will be Dr Kibiru and that is my pride. I am writing a book and hope to share knowledge by lecturing and giving motivational talks.