After a decade of consistent returns for developers, the Kenyan housing industry now features prominently among top investment destinations globally for another first; style.
Mandharini resort developed along the shores of the Indian Ocean on the Kilifi lagoon is one of two projects that were awarded top honours for style in Africa, the other being Nairobi’s Sankara Hotel.
So step back, take a moment and imagine you own a four-bedroom villa within a resort that is built on a quarter of an acre where you can take your family on holiday at any time of the year and the same home is still able to give you an 11 per cent rental yield per year.
Developed on a 150-acre piece of land with a beach front measuring about 200 metres, Madharini consists of 120 homes and a ‘village’ developed like a high-end shopping centre that will also feature a five-star tourist hotel.
“This is one big resort where these villas will provide extra rental space when the owners are not using them,” says Friso Abbing, a director at Hello Properties, the firm developing the multi-billion housing project.
Mr Abbing says that the entire project design, conceived after a survey that sought views from top business executives on what an ideal second home should be, was developed to be a perfect getaway and a high-yielding investment at the same time.
About half of the homes have been sold off-plan through the show house whose fittings borrow heavily from the local community.
The lower level has embraced open spaces where the sunken living room opens to the dining area and the open-plan kitchen, which has fitted appliances and wooden hand carved stools.
In the outdoors, the project will feature a mini golf course and walk ways for the active residents, and a conservancy for protecting indigenous tree species.
Mandharini resort won the accolade for the best residential property award for 2011 on design and sustainability.
Already, a list of international hotel chains have been identified where one will be selected to manage the resort and provide five-star standard hospitality to attract tourists who are able to pay anything from Sh36,000 per night for a four-bedroom villa with its own swimming pool among other amenities.
Peak season at the Kenyan Coast covers the period from August to January, when the homes are expected to report a 60 per cent occupancy rates while the figures for the low season are projected to be significantly lower.
The all ensuite villas have been designed in a way that each of the bedrooms has a balcony opening towards the ocean ensuring that everyone can catch the fascinating views of the waters, watch birds or just enjoy the breeze at sunset.
It is envisaged that the home owners, who would most likely be second home buyers, will have a choice on when they want the villas let out as hotel rooms months in advance to allow for planning.
The proponents, who have also developed another tourist facility in Watamu, say that there have been shifting preferences in the local tourist market where international visitors moving away from just sun bathing to more active holidays.
While the Kenyan property space has been identified by different market intelligence reports as a global leader, consultants in the industry say that the stellar performance is likely to ease in the near future on increased supply.
King Sturge, an international real estate firm, projects that buyers of properties at Mandharini will enjoy an 11 per cent yield on investment, and 5 per cent long-term capital appreciation.
The expected return is significantly higher than what other key residential rental markets are delivering.
HassConsult estimates that the Nairobi rental market is offering investors anywhere between 5- 7 per cent, depending on the location and type of home.
Essentially it means that, if you bought one of these homes today, you are likely to get back the entire Sh52.5 million that it cost you to buy it by 2020.
The proponents at Mandharini say that about a third of the homes sold have been taken up by international buyers, indicating that the Kenyan Coast is emerging as a preferred retirement destination for well-to-do foreigners.
In Nairobi, Grenadier Ltd was recognised for the best new hotel construction in Africa for Sankara Hotel in Westlands where the partially suspended swimming pool is only one of the features that make the Sh2.8 billion hotel stand out in design and innovation.