Nairobi — President William Ruto ascended to power last year with a promise to build more affordable houses for Kenyans.
Since then, the president has made good on his promises through the launch of various low-cost units in Nairobi, with a planned target in Nyamira County, among others.
In March last month, for instance, Ruto launched 6,000 pocket-friendly houses in Ziwani, Nairobi. Its completion will help bridge the housing deficit in the capital city.
To make this goal achievable, many investors have stepped in to assist the government in achieving this dream.
One of them is the Safaricom Investment Co-operative, which is working and has even completed some of the low-cost units.
The cooperative's chief executive officer (CEO), Sarah Wahogo, spoke to Capital Business, and this is what she had to say. Below is the excerpt:
Last year, Safaricom Co-op started building 450 low-cost housing units in Ruaka, Kiambu County. Please update us on the current status of the project
The Miran Residence is an off plan affordable housing project that we launched in 2022.
The construction of this project is happening in 2 phases with phase one already underway.
This 1st phase consists of 4 blocks of 200 units ranging from studios, studio loft, one and two bedrooms.
The show house is currently ready for viewing as we await completion of the first 200 units by 2024.
Percentage of units sold so far to home buyers
The uptake of this project has been quite good considering it is being sold off plan.
So far, we have managed to sell 50% of the units and expect to clear more units with the commencement of construction and completion of the show house.
As part of President William Ruto's legacy project of providing Kenyans with affordable housing, how will your project contribute to this?
A World Bank Report has previously shown that the demand for affordable housing in Kenya stands at 250,000 units per year whilst the supply is only 50,000 units (20%).
That means we have a housing deficit of approximately 200,000 units per year. We intend to further tap into this market and help in narrowing the wide gap.
The Miran Residence is our first affordable housing project, and we purpose to dive deeper in this space in the coming years.
Apart from this, what other successful housing projects do you have or are in the pipeline?
In the past years, Safaricom Investment Co-operative has managed to complete and handover over 600 housing units in Kiambu, Machakos and Kajiado counties.
These include Bluebells Gardens phase 1 and 2 in Syokimau, Ruaka Ridge Apartments in Ruaka, Kantafu Serene Homes in Kantafu, Rongai Royal Villas in Rongai and Kitisuru villas in Kitisuru.
Also, are you looking to launch additional low-cost housing units in the country this year? If so, where will you be targeting?
This year we will be focusing on the construction of Phase 1 of Miran Residence and its phase 2 thereafter.
We are also looking into incorporating a number of housing units within our existing land projects.
A thorough look at Safaricom Investment's dividend pay-out has been dropping from a high of 28 percent in 2012 to a mere 7 percent in 2023. What has caused this significant drop?
Comparing the performance of 2022 and that of 2012 is a bit stretched. A better analysis would be looking at our dividends pay out over the last ten years.
Key to note is that with the implementation of IFRS 15 as from FY 2019, we are only allowed to recognise revenue once buyers complete payment of the properties they have bought.
Before this, revenue would be recognised at the point of the sale agreement. With this change of accounting treatment of revenue, the reported incomes go lower thus affecting the dividends pay out.
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If we keenly look at our financials, we did not make any rebates payment for that financial year.
However, since 2020, we have been making a steady growth despite the challenges most businesses faced with the pandemic.
Are you looking to grow this this year? What are your growth plans for 2023?
This year, we have on boarded new business lines to help us diversify and increase our revenue.
We are in the process of creating an e-commerce website that will bring together a pool of professionals including lawyers, surveyors, contractors, interior designers among others to offer services to our clients at a fee.
We are also looking into providing building services on behalf of our clients. This will make it very convenient for our land clients especially ones that are in the diaspora.
Once they purchase land and the titling process is completed, Safaricom Investment can build on behalf of this client and handover a complete house.
