Cytonn embarks on Sh2.5b mixed-use development in Ruaka

Cytonn's move to go ahead with planned projects is a sign that the firm remains bullish of the real estate sector in the country ahead of the general election

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Cytonn embarks on Sh2.5b mixed-use development in Ruaka
Cytonn's Alma project.

Diversified investment firm Cytonn  has broken ground on a Sh2.5 billion housing project in Ruaka area as it seeks to deepen real estate market portfolio in the area.

Known as Taraji Heights the mixed-use development is Cytonn’s second similar project in Ruaka.

The firm has lined up real estate projects valued at Sh25 billion in Kiambu County as part of its diversified investment strategy.

Growing demand

Speaking during the ground breaking ceremony,Cytonn Chief Investment Officer Elizabeth Nkukuu noted that there has been growing demand from the middle class for residential units.

In Kenya real estate continues to offer a higher rate of return than equities or fixed income a phenomenon that has seen both local and foreign investors invest heavily in the sector.

Ms Nkukuu observed that their real estate projects aims to serve various segments of the market ranging from the high end, for instance Amara Ridge whose construction is nearing completion in Karen, to the middle to lower-middle income like Taraji Heights, which will offer a comprehensive lifestyle and a secure community to families

Cytonn has a real estate deal pipeline valued at Sh77 billion.

Taraji heights will consist of 249 units consisting of 2 and 3 bedroomed and 3 bedroom with DSQ units.

Apart from Taraji heights other real estate projects that Cytonn plans include: Newtown city in Athi River sitting on 1,000 acres, The Alma and Amara Ridge, also a gated community in Karen which is 85 percent complete.

In January this year, Cytonn acquired a 25 percent stake in real estate developer Superior Homes for Sh1 billion as part of its expansion in the real estate sector.

It comes in the wake of a recent report by HassConsult which  downplayed the potential negative impact of the elections on the real estate sector with no drop in house prices or rent experienced.

HassConsult predicted that it is most likely that investors will adopt a wait-and-see stance in the run up to the elections, with a price fall in the sector unlikely.

HassConsult research and marketing manager Sakina Hassanali says while election period create a sense of nervousness mong investors, long term projects are unlikely to be affected.

 In the final quarter of 2016 compared to the preceding period House prices rose at a slower rate due to an economic slowdown and a decline in sales in the wake of poor credit uptake.

The Kenya Bankers Association (KBA) housing price index shows house prices rose by 1.58 per cent compared to the third quarter’s 2.2 per cent.