the developer spoke during the groundbreaking of the Sh1.8 billion Muzi Enzi rental housing project at Tatu City Tatu City developer Preston Mendenhall and International Housing Solutions Kenya managing director Kioi Wambaa during the ground breaking of the Sh1.8billion Muzi Enzi project./ JACKTONE LAWI Tough borrowing conditions has slowed down construction of residential houses and kept rents in Kenya high, according to those in the industry.
The ministry for housing and developers now say banks and other lenders should develop financing products that match the long repayment periods required for rental housing projects. This, they said, will enable, investors recover their money gradually through monthly rental income.
The financing challenge is particularly significant as demand for rental housing continues to outpace supply in Nairobi and other urban centres. Speaking at the groundbreaking of the Sh1.8 billion Muzi Enzi rental housing project at Tatu City, International Housing Solutions Kenya managing director Kioi Wambaa said rental housing requires “patient capital” that is affordable and available over a longer period.
The developers argue that unlike houses built for sale, rental projects require investors to commit capital for years before recovering their investment through monthly rental income. “The rental model basically needs patient capital, when I say patient capital, you need capital, but it’s not expensive.
,” said Wambaa. He said for one to buy land, build and then rent over time to get your returns, they need a longer period of time. Housing Principal Secretary Charles Hinga said housing delivery requires the right combination of land, finance, affordability and appropriate loan tenors.
In a speech delivered by an official in the ministry Don Kagisha, Hinga said Kenya needs long-term capital suited to the risks and timelines of housing development.