Real Estate is an alluring sector for investors. The development of infrastructure is majorly influenced by economic growth that is mainly driven by the emerging middle class and investors. The rise in urban population presents a huge opportunity for investors in the real estate sector. Several large scale developers of residential housing units are seeking to capitalize on the prospect of housing a rapidly urbanising population.
According to the UN-Habitat, a specialised agency on human settlement, Africa is urbanizing at an annual rate of 4 per cent. This makes it the fastest urbanizing region in the world. A gathering urbanisation momentum proposes that three out of every four Africans will be town dwellers by 2050.
Three out of ten Kenyans are currently living in towns, but there are indicators that more Kenyans will move to Nairobi and other urban centres in the forthcoming years. The UN-Habitat places the housing deficit in Kenya at 2 million units. Kenya must build at least 250,000 houses every year to retain the housing deficit. In recent times, the country is managing to build 50,000 houses annually. There would still be an increased demand for houses even if the government was to construct 500,000 houses annually under the Big Four Agenda initiative.
Satellite cities are a new form of speculative urbanism that have only recently reached the African continent. The mega-urban planning initiatives promise to attract foreign investment companies from China and other emerging economies. Although the projects vary in their objective and form, they are generally fuelled by the country’s vast investment potential and high levels of economic growth.
The cities incorporate residential houses, commercial offices, shops, schools, medical centres, sports, entertainment facilities, business and logistic parks. For instance, the global urbanisation trend is evident in Kenya as Tatu City being developed by Rendeavour is set up on the outskirts of Nairobi. While Kiambu county and Tatu City are private development, the government is establishing Konza which is at an early stage.
In theory, such investment should have a positive impact on climate control. This should be represented in the choice of construction material, drainage systems, dedicated green spaces, landscaping efforts and the land occupation density. A realistic development of such size requires a minimum of 2,500 acres of land. The future of urban living is likely to be within the satellites of the city. Importantly, the Kenya Vision 2030 sees urban development sound existing centres as a means of generating economic growth, attracting global business and foreign direct investment. The government sets out to develop integrative plans for six urban regions throughout Kenya.