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Investors to earn billions in 300,000 housing units scheme in Kenya

NHC property: The housing corporation has moved in to put up affordable housing, including for police and civil servants, to help meet Kenya’s huge housing deficit

NHC property: The housing corporation has moved in to put up affordable housing, including for police and civil servants, to help meet Kenya’s huge housing deficit

The government has invited bids from real estate developers to build 6,200 housing units in Nairobi as part of a country-wide scheme that could earn investors billions of shillings under public-private partnerships that will see contractors build, manage and then hand over homes to the State.

The multi-billion shilling plan has targeted construction of 300,000 housing units, with the initial phase being in Nairobi.

In a notice published Monday, the Ministry of Land, Housing and Urban Development said that the houses would be constructed in Shauri Moyo (1,200 units), Park Road (1,000 houses) and Starehe (4,000 homes).

“Most of the housing development will be done through PPP contractual agreements. It is expected that construction will take about two years while operations and transfers may take 10 years,” the ministry said.

The construction work is slated to begin next year on a combined 40 acres of land.

Private developers will, among other requirements, be expected to demonstrate a capacity to raise the funds to undertake the design, construction and management work on the housing projects.

“Local and international investors will be selected in accordance with the PPP Act of 2013 based on quality cost based selection,” the notice further read.

It is estimated that Kenya has an annual demand of more than 250,000 houses spurred largely by the rural urban migration, but only about 50,000 units are built every year piling a shortage of up to two million.

Nairobi County governor Evans Kidero last month announced another housing plan backed by the county government, which could see low-cost houses be built to replace dilapidated ones on 2,000 acres of land in Eastlands through yet another PPP programme.

The estates targeted for upgrade are in Eastlands and include Bahati, Mbotela, Ziwani, Makongeni, Kaloleni, Jericho and Shauri Moyo.

Dr Kidero announced plans to incorporate local universities in the design of these houses, with the construction tenders also maintaining a provision for youth-managed firms.

Like other parts of the country, Nairobi is grappling with a shortage of housing. It is estimated, however, that the Sh43 billion project by the county government will provide housing for 650,000 city residents.

The county government project targets the low and middle income segment, which has not been attractive to private developers in the past due to low profit margins.

The county is looking to establish office blocks, residential units and other amenities, as part of a larger plan to regenerate the Eastlands area.

In the public-private partnership, the investors will put up buildings as part of their equity share of the projects, with the county government providing land as its investment.

State-owned National Housing Corporation has also moved in to put up affordable housing, including for police and civil servants.

Business Daily

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