Over the last few years, Kenya has experienced a real estate boom with investors rushing in to have a slice of Kenya’s lucrative real estate industry. On the flip side the industry is also affected by economic fluctuations, poll jitters and oversupply of spaces to let which outstrip demand.
Kenya’s telecommunication giant, Safaricom, ventured into the real estate market in 2009 after it set up Safaricom Investment Co-operative (S.I.C) to pursue joint investments for its members and has been in real estate space since its inception. S.I.C is a distinct entity from Safaricom PLC.
On Wednesday, S.I.C officially launched its latest project – The Zaria Village; a high-end gated family-oriented real estate project located in the heart of the serene and evergreen Kiambu County.
S.I.C has partnered with Palm ridge, together with mortgage offering banks such as Kenya Commercial Bank and Commercial Bank of Africa, to ensure the project is completed within the next six months.
In attendance was Joe Ogutu, Safaricom Chief Special Projects Officer, who represented Safaricom CEO Michael Joseph who didn’t manage to attend the ceremony.
Mr. Ogutu is responsible for Special Projects including the Foundations and he is a graduate of Economics from the University of Nairobi.
During the unveiling of the ceremony Mr. Ogutu shared his thoughts on the real estate industry.
Here’s are his two cents.
There are many industries which promises fast and quick returns, real estate industry is sadly not one of them.
Mr. Ogutu says the real estate industry in Kenya, Africa and much of the west is not ‘a quick money-making scheme’. To make real money in the real estate industry one needs to be patient.
“When you invest in the Real Estate you have to have a long-term view, anything that is short term you are really deserving yourself,” says Ogutu.
Real Estate is a roller-coaster but if you sit it out you will win big
The real estate industry may at one point have been the strongest and stable sectors but today the case is not necessarily true.
Thanks to changing government policies, a cash crunch, inflation, and external threats like election poll jitters, terrorism etc., the real estate sector is tied to market conditions at a particular point in time and is the first sector which takes a blow when things go south.
Mr. Ogutu says the real estate industry is not for the faint-hearted and before one ventures into real estate they should ready themselves for the ups and downs that comes with the business.
“I have seen how this industry goes up and then comes down where today you will find vacant properties all over and then all of a sudden you find that there is so much demand in those areas so whereas as short term we are seeing a glut of office spaces, vacant high-end houses and so on, this has to be a short term.” Ogutu explains.
Above all Mr. Ogutu says one needs to believe in a particular market strength to weather storms before even thinking of venturing into the real estate. This ‘believe’ will give one a ‘cool head’ to enable them to remain calm and not make drastic ill thought decision when the economy is down.
“You have to believe in this economy, you have to believe that this economy will grow. If you don’t have faith in this economy then there is no point in investing in real estate,” Ogutu concluded.
Meanwhile, Zaria Village project development has 331quarter (1/4) acre serviced plots available for sale. The project has controlled system gates, surveillance cameras and around the clock security patrols. Each unit is served with adequate electricity and water connection in addition to its own bio digester sewerage system.
Prices for quarter (1/4) acre plots at The Zaria Village start from Sh6.95 million ($69,500).
Interested investors will choose from four different house plans dubbed The Zara, The Zaira, The Zayana and The Zazi, with each of the designs having a unique interior and exterior.