The kick-off of Konza City’s construction has sent a breeze of excitement in the real estate market as investors eye opportunities in and around the planned city.
President Mwai Kibaki is expected to break ground on site today, in what observers say will significantly re-align the property market as it will boost confidence in the 5000-acre technology city, one of the Vision 2030 flagship projects.
Land prices are expected to rise in areas near Konza with the excitement, which is also anticipated to trigger a wave of constructions seeking to reap from the city’s crystallisation.
“Initially people thought it wasn’t going to happen... at least not soon, but the groundbreaking now changes all this,” said Timothy Mutisya, a property valuer and manager at Lloyd Masika.
He said prices of both developed and vacant land are likely to be bullish in the next 12 months or so, after which price stability will rein in.
“Prices of land and property will now re-affirm themselves with this new twist to the project,” Mutisya observed.
Speculators who bought land in areas near the Konza City site and developers stand to reap the first-mover advantage as prices have been rising steadily.
“Basically, we see prices likely to skyrocket on the back of this event. So, my advice to landowners in these areas is ‘hold: this is not the time to sell’,” said Michael Kiarie, the managing director of Premier Realty.
Kiarie said those who will “give it a bit of time” will reap maximum returns once infrastructure like roads, railway lines, water supply and sewer lines are laid down.
“Its construction will unlock land values there. If you have land there, you better buy more,” said Kiarie, adding that this will especially be ideal for speculators.
While real estate transactions are expected to slowdown in election year, this will be the opposite for Konza area, according to Mutisya, as more people prowl for opportunities.
“Unless you really need the money for other purposes, the best thing for those with property in the proximity is to wait until the city takes shape,” said Mutisya.
Konza City, 70km from Nairobi on Mombasa Road, is conceived around Information Communication Technology with a strong emphasis on IT Enabled Services (ITES) such as Business Process Outsourcing (BPO).
The city has been dubbed as “Africa’s Silicon Savannah” and besides spurring ICT advancement in Kenya is expected to create vibrant real estate development prospects.
“The groundbreaking is a statement that finally the dawn of the African renaissance is here now,” said Leonard Ithau, chief executive of Petu Property Group.
The State will lease land to investors within Konza to put up facilities such as office blocks, residential buildings, industrial structures and parks. It will also have social amenities like hospitals, hotels and conference centres, shopping malls and a sports stadium.
It is estimated that 37,000 homes will be built within Konza City, which will cost about $1.3 billion (Sh113 billion) in residential investments alone.