High-rise housing could soon become the norm in Nairobi as developers adapt to a relentless rise in land prices.
Spurred by a need to stem the cost of housing in the face of the high land prices as well as expected new financing avenues, developers could start undertaking these larger projects to satisfy the city’s insatiable demand for affordable, decent dwellings.
The advantage is the spreading out of the cost of land among more unit holders. In the current setup, land accounts for up to 40 per cent of the total project cost, but high-rise apartments could bring this to as low as 10-15 per cent.
As of August 2012, a two-bedroom apartment at the Fairview Metro was going for Sh3 – 3.5 million. Arguably, such a price in Pangani, which is relatively closer to the city centre is considered a bargain.
The 12-storey property was developed by Chinese firm, Edermann Properties, that is pioneering affordable housing around the capital.
The company is also building Seefar Apartments along Mbagathi Way which have 11 storeys and will have 266 housing units.
However, such projects are hard to come by with developers citing the prohibitive cost of credit and the inherent risks in loans for large projects. Architect Francis Gichuhi SAID this will be surmounted by pooling resources together.
“Financing for developers at 15 per cent is not viable. But if you can get 1,000 people contributing Sh1 million each in a REIT (Real Estate Investment Trust), then you have a more affordable source of funds,” he says.
While these structures require lifts to access the higher floors, he adds that again, the cost distributed among the residents is bearable.
Other more ambitious plans including Sh7 billion Kasarani Hill Consortium, which will develop 2,500 units on 41 acres of land. The units would be in 18-floor high-rise structures.
Luxury high-rise apartments are also likely to become a fad with the 22-storey LeMac Apartments paving the way.
With a population of nearly four million, the city might have to borrow a leaf from her South Asia counterparts.