Money Markets
Set on a 10-acre estate, the Hogmead residence has now become one of the
priciest units in the residential property market. COURTESY
PHOTO/KNIGHT FRANK
By GEORGE NGIGI, gngigi@ke.nationmedia.com
In Summary
A country house valued at $6.5 million (about Sh565 million) has been put up for sale in Nairobi’s Karen neighbourhood.
Set on a ten-acre estate, the Hogmead
residence is now one of the priciest commodities in Kenya’s residential
property market, confirming the growing status of Kenya as a prime real
estate location in eastern Africa.
Its owners — Fuzz and Bimbi Dyer,
and Andy and Caragh Roberts — had turned Hogmead into a 12-room
boutique hotel whose main room cost Sh42,000 a night. The hotel, run by
The Safari and Conservation Company, was indefinitely closed in October
2013 and listed with Knight Frank around the same time. The Dyers and
Roberts also own and run the luxury Manda Bay resort hit by
cancellations after the kidnapping of an elderly French woman in 2011.
Immediately after that incident, Mr Dyer was quoted telling the Financial Times “My business is over, completely.”
A spate of attacks by Al-Shabaab militants and
travel warnings by several Western nations has buffeted the tourism
industry in recent years, with reports of coastal tourism numbers down
by as much as 50 per cent.
The country house on sale has six large ensuite
bedrooms, six ensuite garden rooms, 12 staff rooms, a standby generator
and a water treatment plant.
“It is a big property, the quality is very high-end
and it overlooks the Giraffe Sanctuary,” said Ben Woodhams, managing
director of Knight Frank, which is handling the listing.
The only other properties the
firm has listed in or above Hogmead’s price range are two beachfront
properties in Kilifi and Watamu, and a boutique hotel on Diani beach. A
residential listing in Nairobi’s Loresho Ridge in the same price range
is now indicated as “under offer”.
According to Knight Frank’s report on unique sales
in Africa, other luxury houses up for sale in Kenya include Amina Ocean
Villa in Watamu, valued at Sh304 million, and the Casa Toni in Shanzu,
priced at Sh200 million. The firm has also listed some hotels among
properties available for between $2 million and $5 million (Sh175
million to 438 million): They include Malindi’s Driftwood beach club and
Scorpio villas.
Mr Woodhams said that the developer of Amina, the
main villa under Medina Palms, had received an offer which he was
considering. Coastal beaches remain a major attraction despite
insecurity concerns in the area, he said.
“The prices are still high,” he said. “They were
expected to soften with the insecurity issue, but they are yet to go
down.” The uptake of luxurious homes indicates the growing class of the
super-rich in the country who are willing to spend locally unlike in the
past where they preferred stashing their money in foreign bank
accounts.
The priciest property sold by Knight Frank last
year fetched Sh1.6 billion. It was set on a five-acre piece of land in
Kileleshwa, Nairobi. The company sold another for Sh765 million in Lower
Kabete.
Mr Woodhams said that some of the buyers were
looking to subdivide the land on which the property was set for
commercial development.
Developers are targeting the upper end of the market, who know what they want and are quick to close transactions.
“Demand for housing is strongest at the lowest end
of the market, but the financing options are almost non-existent,” Hass
Consult head of marketing Sakina Hassanali said in a recent investor
briefing on Kenya’s property market.
“So long as property remains a cash-only purchase, the
private sector market (will continue to be) a high-end affair,” she
said. The local market is also being driven by expatriates coming in to
set up regional hubs for various multinationals. Institutions of global
repute such as Google, General Electric, IBM and Nokia have set up
offices in Nairobi.
Several luxury apartment developments are targeted
at this market. For instance, 94 East Church, under construction in
Westlands, will see Sh72 million units offered for sale, with penthouses
priced at Sh170 million. The houses are set for completion in 18
months.
“When the middle class expanded, the upper middle
class also expanded and are buying these units. It is more a
class-driven issue,” said Villa Care’s managing director Daniel Ojijo.
Mr Ojijo cited three-bedroom units on an apartment
on General Mathenge Road in Nairobi selling at Sh85 million each. All
but three had been taken up in a matter of months.
Each of the units is serviced with its own lift.
Kenya has been earmarked as one of the countries with the
fastest-growing luxury spending potential as more people rise in
economic class.
Data released by the Kenya Motor Industry
Association (KMI) showed that new market entrants Porsche sold 27 units
of its Cayenne models, priced between Sh10 million and Sh30 million, in
May and June.
A recent survey by Standard Chartered Bank showed seven in 10 middle class Kenyans aspired to move to better neighbourhoods.
A report by New World Wealth showed that real
assets were the largest asset class for high net worth individuals
(worth more than Sh85 million) in 2013.
Investors snapped up 104 apartments belonging to
the National Social Security Fund on State House Road, Nairobi in less
than two weeks after they were put on sale for between Sh31-35 million.
Construction for the apartments, marked for
completion in May next year, is yet to take off. The apartments, which
will be set on a 3.5-acre piece of land, will also have a swimming pool,
gymnasium and sauna.
NOTE: Story updated 05.08.14 to remove reference to Hogmead residence being Nairobi's priciest home after the Daily Nation reported a house in Lower Kabete has changed hands for Sh765 million.
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