More than half a dozen golf residential estates have popped up in Kenya in the last five years. Buyers are spending millions of shillings to own homes in them, even though the majority don’t play golf and have no plans to do so.[hidepost=9][/hidepost]
At the Kenyan coast, often associated with prime beachfront homes, stands the 2,500-acre Vipingo Ridge golf development. The project combines scenic views of the region, a game conservancy, sandy beaches and an 18-hole course.
Targeted at Kenya’s wealthy, Vipingo Ridge also has a private airstrip, numerous lakes, woodland areas and nature trails. So far, 600 acres of the 2,500-acre project have been developed.
Although centred on golf, Vipingo Ridge CEO Robert Ward tells How we made it in Africa most of the buyers don’t plan on ever playing. However, a fair number have actually taken up the game because it’s on their doorstep.
But others just want to be part of the estate. The lifestyle is appealing because of the security, provision of services and sharing of costs. “Somebody would buy here to enjoy all these other facilities. They may be a fanatical walker, or horse rider, or just be somewhere quiet and read books,” he says.
Most gated and golf residential projects in Kenya claim to target the growing middle class. At Vipingo Ridge, Ward says the products on offer at the moment are built for the wealthy. The estate is dotted with luxury homes each worth about $560,000 and upwards. The project’s phase one price list indicates that one-acre plots are selling for between $160,000 and $300,000 depending on the locality. Some owners have bought multiple plots and constructed mega mansions with several swimming pools.
Ward notes most buyers are business people and the majority pay cash.
“Kenya is a very vibrant economy. Even we have been surprised by the sales. We have not promoted this development outside of Kenya. The demand and money within Kenya is enough to sustain an undertaking of this size. But we do know that as we start moving towards 500 units and more, we will need to appeal to a broader base and go international.”
Rich ‘sensible with money’
Ward says many find it appealing to live in a secure community with like-minded people and save costs by using shared services.
“Rich people are often the most sensible with their money. They don’t get rich by being totally extravagant and taking on mindless expenses. They can afford a beachfront property but it is costly. Our five-acre beach plot is valued at just under Ksh.100m ($1.12m). For that kind of money you could get two homes at Vipingo Ridge. We have also done a low-density development here so they can still feel very exclusive and private.”
Ushwin Khanna, a lawyer working in Mombasa, is one of the home owners. He says he stays there about twice a month. But when he retires in a year, he and his wife plan to live there full time. Their house is located a few steps from the second hole of the golf course.
“I have played golf for many years. I just loved the idea of having a house in a golf estate, and being right beside the course couldn’t be better. It is so picturesque.”
But he points out that a downside of buying into such a project is the expense involved.
“The golf course and other infrastructure have to be maintained. So we all must contribute by paying a service charge. It is becoming increasingly expensive for every individual.”
However, he adds, any golfer would understand. “Living on a golf estate is about the greenery and the peace and quiet you experience. The tranquillity is unbelievable.”
According to Ward most buyers are Kenyans and expatriates. The profile of buyers includes people like Khanna who work in Mombasa city, a one-hour drive away, and want a weekend residence or a permanent one. The development has also appealed to investors seeking returns.
“Then there are people looking for a holiday home they can visit every three months. Some of our high-profile owners say when they are here they can ‘be normal’. They don’t have to worry about their bodyguards. They can walk around the estate away from the chaos and realities of their lives.”
Ward adds golf has a significant effect on the value of property.
“For some reason having a golf course raises the profile of your development and makes it more attractive. Golf is obviously a sport often played by wealthy people. So when you are doing a luxury estate, golf is something that goes hand-in-hand.
“Additionally, I think golf is a sport that is growing in Kenya. Initially the golf courses won’t be big revenue earners in their own right, but they will help drive the real estate sales. If a course adds 20% to 30% to the property values, you then very quickly recover the investment you made.”
Not an easy ride
However, Ward notes that “it is not always sensible to do a golf course” warning that a developer taking on such a project should not expect an easy ride. “It is massively challenging because you are basically developing a small town.”
He adds there is opportunity for golf projects in emerging towns such as Naivasha, located about 90 minutes outside Nairobi and known for farming and tourism, as well as Athi River an industrial town that is home to a number of cement factories.
And besides golf there are opportunities to build around other niche sports or hobbies popular among the wealthy. “There is a development in Nairobi based around an airstrip for people who enjoy flying. In other parts of the world, estates focus on polo, for instance. We have a vibrant polo scene in Kenya, so one day we might see a polo-based development.”