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Corporate Real Estate > Real Estate development in Mombasa

Business Opportunity

Industry: Housing


Sector: Affordable housing (small space living environments) selling for between USD 20,000 – 50,000


Transaction Type:
Corporate Real Estate

Country of Origin: Kenya |


Target Areas: Worldwide


Business Review

World Bank report indicated that the private sector in Nairobi delivers an average of 15,000 housing units annually and concentrates on the profitable middleclass broken down as follows: middle-income at 48% high income at 35%; 15% in the reasonably priced range with about 2% representing the low-income category. In December 2012, the lowest price house formally built by a developer cost USD 14,000. However there is negligible national supply on the market for houses selling less than USD 50,000, especially in Nairobi and Mombasa Cities. They are small volume ‘affordable’ housing developers. Their offerings are all above USD 30,000. Their housing blocks are no more than 6 floors, have no lifts and designs are plain. The project’s target market is low-middle class segment (including high net worth individuals and civil servants). Potential tenants for these kinds of houses earn salaries of USD 400 upwards and so can rent the smallest unit at USD 150. Those who earn at least USD 1,000 per month can buy the smallest unit of USD 27,000. Maximum expected rent for the three-bedroom unit is USD 300; this unit is expected to be sold at about USD 49,000. Joint Venture Partners will operate this project during development phase and upon project handover and full payment of apartments, transferred to purchasers.

Products
Micro flats
Services
Construction of buildings, and sales of flats
Financial Information

Asking Price: on request


Highlights

We have created a 1,300-housing investment opportunity in a desirable part of Mombasa. The small space living environments will consist of micro flats, two options of one bedroom, two options of two bedroom and three bedroom unit.

Our client is seeking USD 500,000 to be used as deposit for the site as well as to trigger off-plan house sales expected to bring in USD 5 million within 2 months. Based on our projections, Investors will see a ROI in year 2 of 35%! There are current pre-sales negotiations with government civil servants housing scheme to take up a big number of the units.

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