By Property Correspondent
Banda Homes Ltd, the leading real estate developer, will hand over its new housing units to investors in September this year. The housing project on its final stages consists of 100 units of three bedroom bungalows master en-suite.
Located on Kenyatta road, the new Pinewood estate housing units which were selling at Ksh3.99 million in 2018 are now reselling for Ksh7million. The developer, however, says that it’s only the clients who are reselling theirs as the company had sold out the units already.
On completion, the project will be Banda Homes’ biggest real estate development so far and the 8th they have handed over in the last 2 years.
Their earlier development on Kenyatta road, Oak Park estate was handed over in 2019. Oak Park was hailed on several real estate magazines in the country due to its uniqueness, setting, design and magnificence.
Banda Homes Ltd Director Mr. Andrew Kamau says that their strategy is to build sizable estates and in his own words, that makes sense. He explained that it’s easier to ensure security in larger estates and to provide the family and community setting in bigger developments. “The increase in value is also immediately felt for the investors in such estates”.
Mr. Kamau said Pinewood ,on handover, will be having fully paved roads, a borehole to supplement the existing water supply, a green area for children to play and family gatherings and well-trimmed hedges in addition to the stone perimeter wall. This will be just one of a series of handovers that will amount to more than 1800 houses by December 2020.
The real estate company recently introduced The Client regulated development (CRD) model which seeks to involve the clients more in terms of development regulation. In this model, the clients do not pay money directly to Banda homes but escrow accounts through which they can be able to control the funds they remit to developers as construction progresses.
Unlike the normal off-plan as is known, the CRD model ensures that the developer only has access to profits after the development has been handed over to clients.
Mr.Kamau says that most of the ongoing projects have already adopted this model thus ensuring fast development and delivery timelines.
The 100 unit project set to be handed over to the investors was recently in the news in the mainstream media as clients claimed delayed handover but which the developer countered by saying the construction was well on schedule.
“Lately, we have had issues in the media concerning off plan projects, the main issue is trust between the developer and the investor, but to address this challenge I think the best way is to give power to the clients to have more control on their investments,” said Mr. Kamau.
Property experts say buying off-plan allows the investor to arrange his or her finances better which means one will not have to be burdened with a loan for the whole amount of the property.
Pinewood ,on handover, will be having fully paved roads, a borehole to supplement the existing water supply, a green area for children to play and family gatherings and well-trimmed hedges in addition to the stone perimeter wall
It’s generally cheaper to buy off-plan (up to 30 per cent below market value) and that gap is expected to get bigger as developers like Banda Homes work to drive interest in off-plan investment.
“We operate the largest real estate developer in Kenya, having sold more than 1500 units to clients since our inception in February 2018. We present a unique value preposition, our projects have consistently shown a return of about 27 – 29% inside of the twelve months that are the stipulated construction period,” says Mr. Fabian Nzivo, CEO Banda Homes Ltd.
He said in the last two years the company shifted its focus to providing houses for middle-income earners after they undertook a thorough market research.
“We used to build houses for people in low-income bracket but when we carried out market research, we found that demand was highest among middle-income and upper-income earners. This is what drives Banda Homes; providing affordable housing to middle income earners,” he explains.
There have been a lot of criticism recently in the mainstream media about off plan housing model but despite this, off plan property is becoming a popular investment option, particularly among those in middle class bracket, and other first homebuyers as they are provided with ample time to save for settlement
“It’s true we have faced a lot of criticism. But we have built houses that meet our clients’ needs – highly functional houses, without compromising on quality like the units we are handing over to clients this December; those against our housing model especially on social media are driven by ignorance and are being used by our competitors,” he notes.
Most investors who have bought homes from Banda Homes on their unique off the plan model have seen their houses increase in value like in the housing projects located in Waiyaki Way, Kiambu Road, (Thindigua) and Kenyatta road (exit 14 from Thika superhighway.