Purple Dot International Ltd is a rapidly growing property developer in Kenya. We speak to the company’s General Manager, Jiten Kerai.
Please give us a brief history of Purple Dot International and share the vision of the company’s founder(s).
It was 2011, when we first started thinking about forming an experienced and skilled team that would have common interest and business values around real estate investment solutions. And so the vision was to have strong leadership that would deliver quality projects at lowest, most competitive prices by planning and developing with a team of renowned architects, engineers, interior and building contractors, administrative teams. Affordable payment plans and inclusive approach for our investors was at the heart of how the structured the business model. And this investor-centric approach continues to this day, ten years down the line.
Why did you pick Kenya to launch your real estate journey?
Most of the team is first generation Kenyan who are already established businessmen in different fields and had a keen interest in the booming real estate sector.
We shared common business values and the vision to help local investors diversify their investment portfolios in a long-term sustainable way through local and regional property investments, as opposed to them investing only in Middle East, Asia or in Europe over the years.
So, we felt that there was a need for a new, strong, trusted team that could deliver this kind of investment option locally.
The market and investor response have been equally very good over the years, which continues to be encouraging.
You have taken the real estate development sector in Kenya by storm with major back to back projects. What is driving this rapid expansion?
At the center of all the planning and decision making for residential and commercial projects continues to be the strength that comes from the Board’s synergy and governance. Each Director and team member understands and embodies their responsibility in line with the vision and strategic objectives set from time to time.
So, this consistency I believe is the biggest factor in driving the rapid growth.
But of course, the market, the business model, structure which includes the professional teams, project location and quality, research and investor returns continue to shape the project growth as well.
What would you say are the unique features of your projects? How have you differentiated them from the rest of the properties available on the market?
A lot of forethought goes into the research, feasibility and planning phases of whatever project we propose to the Board and investors. This really helps us define the concept, design, pricing, project management and marketing among other things.
We really take into account the on ground, practical needs of the property buyers and investors and so, we see that the real value is in the little day-to-day design details. For example, our developments do not occupy the entire piece of land; we reserve a common area where the residents can spend time with families, or offload goods with ample space for large vehicles to manoeuvre without blocking the area.
At Elina Residences for example, we didn’t plan for a swimming pool knowing that less than 10% of residents would actually use it and it would unnecessarily add to their service charge when it comes to pool maintenance.
The Athi River and Kinani warehouses were planned around the foreseeable sprawl into the area due to road infrastructure opening up and access to labour, among other things.
We also pay keen attention to project quality and pricing to ensure it is competitive yet affordable for the identified buyers or investors.
How have your projects been received so far by the targeted market?
There has been immense support from both the investors who have continued to be with us since we started, as well as buyers and tenants at our various properties.
From the location to the designs, we have made sure to include their feedback with every consecutive project. Having foresight into what anticipated in a location really does make a big difference – at Elina Residences for example which nears completion later this year we have a centrally located project which has access to Riverside, Lavington, Upper Hill, Westlands and CBD. The new expressway will add even more value to the apartment buyers working in the area.
Most recently, we have launched phase 5 of our industrial warehouses and are looking to launch our first commercial office spaces along Mombasa Road at Purple Tower.
There have been cases where developers have lost the trust of investors and other property buyers after project delays or complete failure to deliver. What is Purple Dot International doing to avoid these pitfalls?
We have been very intentional and consistent in ensuring that our investors are included in and around our decision making on projects. This is something that the Board who are also shareholders, hold themselves accountable for as a team.
When we plan for a project, investors share their feedback and will invest based on concrete information. And then we would start construction only when we have full faith and buy-in from the investors. We also don’t plan for multiple projects simultaneously and deliberately start planning for a new project once the previous one is at least 70% sold, thereby reducing any possible dependence on bank financing.
It really comes down to understanding risk, communicating openly and complete ownership towards stakeholders, if we are looking at long term sustainable growth.
Many developers are cashing in on the “affordable housing” quest by the Government. Currently your homes appear to target upper middle income segment. Will you consider affordable housing at some point?
The affordable housing market is driven by a lot of factors and the Government certainly has been incentivizing this initiative.
We are currently looking into this and trying to build a model that is not only affordable but delivers quality long term. The quality of interior finishes and consequently their maintenance would be a major factor to consider for the owner or resident and so trying to balance the quality and price is something we are looking into at the moment.
Tell us something about the partners you work with – professionals, contractors, financiers etc. Do you always work with the same team? If yes, why?
Well we do have a core team that works closely with our building committee. This team would basically have proven skills, experience, quality workmanship, and understanding of our expected output from our previous projects.
However, we do stay open for innovative ideas given the type of project from time to time. So an architect or contractor that works with us on some of our residential developments may not be on the team that has more experience with commercial for example. The same applies to contractors and mechanical services teams.
What is your assessment of the real estate sector in Kenya in terms of operating environment, availability of credit, incentives from Government, quality manpower etc.?
We still see a positive outlook as a sector overall. There are of course challenges that all developers would face in terms of process or legal structure in real estate, land or area zoning, different ways of working in different counties with some having more restrictions than others, environmental policies that may still be reviewed as and when things unfold.
Access to credit is good and getting more and more structured with time, as banks take accountability and ask for more concrete financial plans from developers, do physical site checks and due diligence on their part.
We have also seen good support from the Government in terms of roads, water and sewer infrastructure around Athi River over the years. Where we see have seen skill gaps in labour, we find a little bit of training over time usually makes a big difference.
Where do you see yourself in the medium term and long term?
As a company, the plan is to expand some of our value-adding investment opportunities regionally into surrounding countries in East Africa, while setting up a structure that will hopefully drive us into other markets including Africa and Asia in the long term as the world continues to connect.
