If you build it they will come, but not if they cannot afford the rent

A housing Estate on the Riat Hills of Kisumu. Riat Hills has been attracting the interest of some of the upwardly mobile in Kisumu owing to its exclusivity and expansive views.Hordes of real estate agents have since pitched tent in the area, a situation that has seen land prices soar. But this has not translated to improved infrastructure as roads still remain underdeveloped. PHOTO | FILE  

In Summary

• Property developers in Kisumu who spoke to DN2 said the apathy by most would-be tenants was based on the premise  that the high rent did not match the value of amenities available.
• Ridge Park, whose construction was completed in 2011, is one of the new estates currently experiencing low tenancy. The 23-unit estate comprising of eight three-bedroom maisonettes and 15 three-bedroom bungalows has only five houses rented out with the rest used as holiday homes by owners who purchased them.
• According to information from Villa Care, the agency responsible for marketing the houses, placed the rental rates at Sh50,000 for a bungalow and Sh70,000 for a maisonette.

By SILAS APOLLO
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High rent and a lack of social amenities is turning out to be a deal breaker for prospective tenants looking for housing in Riat Hills estate, Kisumu.

Riat Hills is about five kilometres from the central business district of Kisumu and was previously perceived as inaccessible due to its hilly terrain

Property developers in Kisumu who spoke to DN2 said the apathy by most would-be tenants was based on the premise  that the high rent did not match the value of amenities available.

Mr Wycliffe Abok, proprietor of Kisumu Real Estate points out that no matter how attractive most of these houses are, rents should be levied in a way is affordable to tenants.

“There is a false sense of value where one feels they would pay more for a house that would cost them less in other estates,” he said.

Mr Nickson Opande of Opande Africa Investments said a lot of residents would opt to stay in older housing estates owing to easier access to basic amenities.

“I once tried selling some units in the area and only managed to sell one. I think there is a lot of reluctance by residents who still view the place as underdeveloped,” he said.

PANORAMIC VIEWS

Ridge Park, whose construction was completed in 2011, is one of the new estates currently experiencing low tenancy. The 23-unit estate comprising of eight three-bedroom maisonettes and 15 three-bedroom bungalows has only five houses rented out with the rest used as holiday homes by owners who purchased them.

According to information from Villa Care, the agency responsible for marketing the houses, placed the rental rates at Sh50,000 for a bungalow and Sh70,000 for a maisonette.

Consequently, the houses sell for Sh20.3million for three bedroom maisonettes and Sh13.5million for the three bedroom bungalows.

One of the property’s main selling points is the Riat Hill slope which offers residents panoramic views of Lake Victoria as well as the city centre.

“The development has incorporated the latest ultramodern infrastructure and employs green technologies in  lighting and water management to make each resident feel catered for,” states its description.

Riat Hills has been attracting the interest of some of the upwardly mobile in Kisumu owing to its exclusivity and expansive views.

Hordes of real estate agents have since pitched tent in the area, a situation that has seen land prices soar. But this has not translated to improved infrastructure as roads still remain underdeveloped. 

Other projects coming up in the area include a Sh1.3billion property by Coromandele Group, a Sh2 billion housing project by Home Afrika as well as a 60-acre Milimani West under Kisumu Real Estate amongst others.

Ordinarily, renting a house such as those being sold by Ridge Estate would range from Sh90,000 to Sh100,000.

These same figures would be considered as starting rent in Milimani Estate, Kisumu due to the proximity of the latter the city centre.

Mr Dev Karia, director of Lake Estate Agency in Kisumu, said Ridge Park estate was a victim of seclusion because it is the first gated community ever completed in the vast hill.

MARKET SURVEY

“At this time, Sh70,000 is too much to charge as rent but with more property development in the area, it will make more economic sense to build roads and other amenities,” said Mr Karia.

Mr Abok advises that to attract tenants, there is need to charge a minimum rent of Sh70,000 for the maisonette and increase gradually once all infrastructure is in place. 

 “You are allowed to increase your rent at 10 per cent every year. The rent is not too high and a majority of residents are not comfortable paying that amount,” he said.

But, Mr Michael Wahowe, an agent with Villa Care agency said that unlike notions of slow and poor sales, it was only a matter of time before people realise what value for money that the houses offer.

“There is the right for one to bargain the rent as any other tenant would do. But even so, the Sh50,000-Sh70, 000 is quite  good. If you go to other towns outside Kisumu say Nairobi, you will realise that similar houses go for much higher rates,” he said.

Mr Njoroge Ng’ang’a of Home Afrika thus advises developers to carry out market surveys on areas they wish to develop.

“We did get valuable feedback on the project we are currently initiating in Riat Hills. We want to build communities around Africa by providing quality, sustainable and affordable housing to people,” he said.