Housing Finance (HF) has signed a joint venture agreement with a land owner in Kiambu County for the development of 220 housing units.
Kahawa Downs Development Estate is the second joint venture project between Housing Finance through its wholly owned subsidiary Kenya Building Society (KBS) and a land owner.
Under the agreement, Housing Finance will develop the 220 units comprising of 2 and 3 bedroom apartments.
The apartments which will sell at between Sh5million and Sh6 million are set for completion by December 2015.
Housing Finance Managing Director Frank Ireri said the firm has embraced the concept of joint ventures to further raise its involvement in the supply of affordable housing units.
Ireri said the firm is keen to work with the county governments on a public private partnership model to deliver affordable housing to residents of the county.
“Housing supply in the country is currently hindered by unavailability of serviced land, while the rising cost of building materials further contributes to increasing the cost of constructing housing units,” Ireri said. “The supply of serviced land, in Nairobi and neighbouring counties in particular, is lagging behind demand. The cost involved in servicing available land is excessively high.”
In the joint venture, the Land owner will be contributing the land and then HF contributes finances for construction.
Precious Gardens in Riruta was HF’s first joint venture project where Housing Finance partnered with a private developer to build 328 flats comprising a mix of one, two and three bedrooms.
The concept of joint ventures in construction industry is relatively new in Kenya and involves a landowner teaming up with a financier to realize a project with the latter receiving a percentage of the profit from the deal as opposed to interest as is the case in loan financing.