The Kenyan real estate sector is grappling with a major confidence crisis. The sector, which had hitherto witnessed unprecedented growth as Kenyans pursued dreams of owning homes, is now struggling, largely because the level of trust for developers is at its lowest. In fact, a significant number of Kenyans who trusted off plan developers with their hard earned money in the hope of owning a home one day are today a troubled lot. Worse still are many others who opted to invest their savings with real estate companies that promised impressive interests of up to 18 per cent.
But in the midst of the disappointments, depression and heartbreaks that many Kenyans are enduring in the hands of developers, one firm is flourishing. Verified Real Estate Limited, a relatively young company, has emerged as the face of hope amidst despair. While a few firms are killing trust, Verified Real Estate is building trust. While others are blaming Covid-19 pandemic for stalled projects, Verified Real Estate is busy implementing projects. And while others are contemplating folding up, the company is exploring new opportunities.
“Right now there’s a lot of negativity in real estate because people are losing money,” says George Mwangi, Verified Real Estate Founder and Chief Executive Officer. He adds that by being able to build trust, the firm has managed to implement four projects during one of the hardest periods characterized by Covid-19 ravages not only on the real estate sector but on the economy at large. “This has been due to sheer hard work, prayers and strategy,” he notes, adding that while Covid-19 hit people with underlying conditions extremely hard, the same was the case with real estate firms. “Those companies with underlying conditions are the ones blaming Covid-19 for failure to deliver on their promises.”
For Verified Real Estate, the winning card has been building trust. To achieve this, the firm has opted for the less travelled path. In the Kenyan real estate sector, a majority of firms have chosen two routes. One is the off-plan development route in which developers acquire land, build a show house and entice dream home owners to buy into the project. The idea is to raise funds before implementing the project, a scenario that has resulted in stalled projects and disappointed customers. The second is building complete projects and going out to look for people to buy. This is a scenario that has resulted in developers holding projects that cannot attract buyers.
Verified Real Estate, which is barely five years old having been established in 2017, opted to be different. The firm has adopted an entirely new concept of mid-plan development. According to Mwangi, the whole idea of mid-plan development is giving customers the benefits of off-plan without losing trust. For this to happen, the firm comes up with projects and seeks to sell them with a payment plan that ensures it can easily implement the project and deliver on the basis of having backup financing. In essence, projects cannot stop because clients have not completed their payments. “Our concept is mid-plan developing because we wanted to be trusted,” he states. He adds that the mid-plan idea is designed to eliminate the challenges of off plan developing while retaining the benefits. With back up financing there are no challenges of delay in construction. Besides, the firm is also able to take a few mortgages unlike off plan developers.
Adopting a unique strategy has brought about phenomenal success for Verified Real Estate at a time when many developers are struggling. The firm, which works in partnership with a construction company, has for the short duration been implementing gated community projects in Ruiru sub-county, Kiambu County under the brand name of Amalia. Cheekily, Mwangi came up with the Amalia brand after searching for Spanish women’s names on the internet.
Of importance to note, before starting to implement projects, Verified Real Estate undertook extensive research and feasibility studies on the wider Ruiru area because it wanted to undertake demand-driven developments. The research proved that Ruiru had become one of the most sought areas having opened up because of the by-passes.
In fact people were walking away from areas like Kileleshwa, Kilimani and Lavington where developers have concentrated on two-bedroom apartments, opting for stand-alone houses in Ruiru. “Instead of buying an apartment in Kileleshwa, people are seeing sense in a stand-alone house in Ruiru at the same price,” avers Mwangi. He adds that apart from being a few kilometers from the Nairobi central business district, major developments in Ruiru like Tatu City have propelled the profile of the sub-county significantly.
Armed with a clear strategy and ideal vision, Verified Real Estate was certain Ruiru was the place to start its journey of conquering the real estate sector. Its first project, Amalia Gardens, involved 18 four bedroom master ensuite maisonettes with servant quarters. Being a new firm doing its first project, Verified Real Estate had to start with a show house. The houses, which were selling at KSh12.5 million, were all bought in less than 12 months and the firm went on to deliver the project as promised.
The demand for Amalia Gardens was overwhelming and many clients missed out. To a large extent, this was a blessing in disguise because the moment Verified Real Estate launched its next project, Amalia Greens, the 16 houses were bought quickly like hot cake. “We did not have to do any advertising because the demand was already there,” notes Mwangi. Amalia Prestige, which involves 26 houses, was the third project by the developer. Interestingly, the firm embarked on the project around the same time Kenya was reporting its first case of Covid-19 in March 2020. Instead of getting into a panic mood, or blaming the pandemic in order to fail to keep its promise, the firm ensured that amidst the fears, implementation of Amalia Prestige went on. Luckily for the firm, customers who had bought the houses did not stop servicing their payments. For those that experienced difficulties, the firm was able to restructure and accommodate longer payment periods. This was possible because of having backup financing that ensured project implementation did not stall.
With Amalia Prestige nearly delivered, a few months ago the firm embarked on Amalia Paradise. This is an exquisite 63-house project that gives new meaning to the gated community concept. The key features of the project include contemporary flat roof design with well-designed functional spaces and detached ensuite servant quarters, clubhouse, fully fitted gym, dedicated kids play area and tennis court. Others are convenience store, private gardens, solar water heaters, spacious double volume lounge, family room and spacious American open plan kitchen with an island.
Verified Real Estate has already managed to sell most of the units and intends to keep its promise and trust by delivering the project on time. For the firm, getting buyers for the units not only at Amalia Paradise but even in the other projects has been the easy part owing to its intriguing architectural designs, elegant finishes, great workmanship, well-thought functional spaces and obvious value for money.
The desire to ensure customers get value for money is critical. In fact, Verified has made it a policy to directly import products particularly for finishes and interiors instead of buying expensively from local suppliers in order to pass on the benefits to customers. In Amalia Paradise, the units are selling at KSh16.5 million each. “We import our finishing products to cut down on building costs and pass the benefits to customers,” explains Mwangi.
Despite achieving significant success in a relatively short period, Verified Real Estate is extremely careful when it comes to launching new projects and making decisions on the number of units for each project. Unlike other developers, the firm has a formula that informs the next project and whose common denominator is the financing factor. “For us we avoid biting more than we can swallow unlike most developers whose strategy is bite as much as you can, chew as fast as you can and hope you don’t choke,” says Mwangi.
Going forward, Verified Real Estate intends to maintain its clear focus on demand-driven development. For the firm, the end goal is always about serving customers as opposed to doing big projects. “We will continue to do projects based on demand. Unless there are people to serve, we won’t do development,” states Mwangi. He adds that focus for his company is not on the number of units but on the customers the firm is able to serve. “We want to serve more people in the right way by understanding their needs,” he concludes.
