China firm plans to build most expensive luxury apartments

Money Markets

An artist’s impression of the Kileleshwa-based project: The total cost of the housing project is Sh4 billion. PHOTO | COURTESY 

By John Gachiri, jgachiri@ke.nationmedia.com

In Summary

• Aviation Industry Corporation of China (Avic) has been given the green light to construct four-bedroom luxury apartments that will each cost Sh88 million.
• Within the same development, Avic will also construct two- and three-bedroom units each going for Sh27 million and Sh38 million respectively. The total cost of the housing project is Sh4 billion.
• The residential development, which will be called Avic Park, is expected to be completed within 24 months.
• For the Chinese State-owned Avic, the Kileleshwa-based Sh4 billion project will be the smallest publicly announced investment in its property portfolio.

Nairobi’s Kileleshwa estate will soon have the most expensive apartments in Kenya.

Aviation Industry Corporation of China (Avic) has been given the green light to construct four-bedroom luxury apartments that will each cost Sh88 million.

Within the same development, Avic will also construct two- and three-bedroom units each going for Sh27 million and Sh38 million respectively. The total cost of the housing project is Sh4 billion.

The residential development will have a total of 110 apartments following licensing by the National Environment Management Authority (Nema).

“This project is for the construction of a block of apartments with three basement floors and 11 typical upper floors having a total of 110 apartment units, associated amenities and facilities and amenities,” said the licence by Nema.

The residential development, which will be called Avic Park, is expected to be completed within 24 months.

Villa Care, the selling agents, says that Avic is putting up the high-end apartments as a market response to demand for luxury apartments which has been influenced by expatriates of multinationals that are choosing to set up their regional or Africa offices in Nairobi.

“This is the most expensive and largest for the whole market. The developers Avic are known for large projects and high quality finishes,” said Villa Care managing director Daniel Ojijo.

The apartments are intended to beat the records of other luxury apartments in a city that has seen many property developments in the recent years.

“Due to the recent increase in foreign direct investment (FDI) and the entry of multinationals into various sectors of the East African economy, there is a clear need for both high quality residential and commercial real estate in the region’s capital, Nairobi,” said Villa Care in a statement.

Swimming pools, basement parking and gyms are other facilities that will be included at Avic Park.

For State-owned Avic, the Kileleshwa-based Sh4 billion project will be the smallest publicly announced investment in its property portfolio.

In July, Avic announced that it was investing Sh20 billion to construct a 43-storey office block, apartment blocks, and a five-star hotel on a 7.5 acre plot in Westlands, Nairobi.

READ: Chinese firm to build 43-storey block in Nairobi

Africa office

The 43-storey building is also going to be Avic’s Africa office.

The proposed five-star hotel, whose construction has been recently blocked in court by rival Villa Rosa Kempinski Hotel, is to have 35 storeys.

The apartment, part of the Westlands-based mixed development, will comprise two 24-level, a 25-level, and a 28-level towers.

Avic also bought a 38.9 per cent stake in Centum Investments’ Two Rivers mixed development in Runda for $70 million (Sh7.2 billion).

The Chinese parastatal is also in transportation business having entered into an agreement to distribute vehicles for compatriot firm JAC Motors.

The real estate sector has been booming over the last decade but industry consultants say that there are signs of the market cooling.

Marginal increase

A sector report by Knight Frank says that prime residential areas, retail commercial properties and offices recorded marginal or no increase in rents in the first half of 2015.

Other property consultants, however, said that there are opportunities especially in the counties.

“County land values and opportunity is within reach for investors looking to make a difference in the market. Nairobi County remains the key business hub for major organisations due to the higher levels of development and infrastructure in place,” said property consultants Broll.