Housing Finance (HF) is set to launch two major housing projects along Thika Road this year, marking the latest real estate development that is seeking to attract more residents along the super highway constructed three years ago.
The mortgage financier also plans to build the second phase of apartment units in Riruta, dubbed the Precious Heights estate. The three projects will see HF build an additional 1,500 units in total.
“The projects are joint ventures with land owners. They provide the land and we finance the development,” said chief executive Frank Ireri, who however declined to reveal the value of the projects.
The mortgage firm says it will break ground on the second phase of its Precious Heights apartments in Riruta next month, while parceling work on an 183-acre serviced plots scheme in Ruiru (Theta Grove) is expected to commence in July.
HF will also start construction of two and three-bedroom apartments at Clayworks along Thika Road in September.
The Nairobi Securities Exchange-listed firm is increasingly opting for joint ventures with land owners citing the rising cost of land in urban areas.
It has taken a 50 per cent stake in previous joint ventures including Kahawa Downs, an entity through which it built apartments in Nairobi’s Kahawa Wendani.
In such 50/50 equity partnerships, HF has contributed capital equivalent to the value of the land provided by the co-investors.
The real estate projects are part of HF’s strategy to grow and diversify its business that has largely relied on financing purchase and construction of houses and commercial buildings.
HF, which recently placed all its subsidiaries under a non-operating holding company, is now seeking a larger presence in property development, bancassurance, retail and corporate banking.
Real estate developers have been enjoying double-digit returns from sale of houses and serviced land parcels in major towns.
Besides real estate development, HF has also been opening more bank branches in a bid to grow its customer base, which is expected to lead to a lower cost of funds in the form of deposits.
A larger customer base is also expected to help the firm generate more fees from banking transactions.
Mr Ireri said HF would soon seek a medium term debt from development finance institutions to fund its growth plans.
