The country’s Luxury Real estate has been hard hit with the recent tough economic times leading to a large number of high end properties being seized by auctioneers.
The upcoming auction of assets from the former Intercontinental Hotel in Nairobi, scheduled for August 29, 2024 only serves as an example to the grave situation being faced by multiple property owners in the country.
Garam Investments Auctioneers announced the sale of a wide range of hotel equipment, including cold rooms, reception counters, 2-door fridges, assorted chillers, work stations, roof fans, exercise machines, massage beds, weighing scales, Jacuzzi, Metallic lockers, spotting tables, dryers, washing machines and steam pressers from the once prestigious city hotel.
“Duly instructed by the Kenya Hotel Properties PLC, we shall sell the undermentioned goods belonging to the former InterContinental Hotel located off Parliament Road on Thursday, 29th Day of August from 11 am,” the Auction notice reads in part.
Elsewhere, Integra Auctioneering (K) Company has also scheduled the auction of Osotua Luxury Resort in Naivasha for September 10, 2024. This expansive property, boasting 30 studio apartments, villas, and various luxury amenities, is being sold alongside 10 acres of land.
The sale’s conditions for this high value property are set on a high, requiring substantial deposits and swift payment of the purchase price.
In their auction notice, Integra Auctioneering (K) Company quotes the property’s asking price at Kes. 850,000,000.
“The subject properties located within OSOTUA LUXURY RESORT, Naivasha. Nakuru county. The land measures 3.757 hectares or 9.28 acres. The properties comprises of studio apartment and villas. Asking price Ksh: 850M” the notice reads
Nairobi’s outskirt areas like Kitengela is also feeling the effects of the economic crunch with Nguru Auctioneers announcing the auction of several vacant plots in prime locations near significant landmarks.
The country has most certainly been struggling with high inflation and political instability post pandemic. The Central Bank of Kenya reported an increase in the ratio of gross non-performing loans to gross loans, rising from 13.3% in December 2022 to 14% in February 2023. This uptick indicates a growing number of borrowers struggling to meet their financial obligations, prompting financial institutions to intensify asset seizures and auctions.
The real estate sector, once a driver of economic growth, has been particularly hard hit. Despite a brief recovery in 2022, fueled by increased investor confidence and government infrastructure projects, the sector now faces significant headwinds. Rising operational costs have further exacerbated the challenges faced by businesses thus leading to an increase in distressed property sales.
While the average rental yield for office spaces saw a slight increase to 7.35% in 2022, this improvement was insufficient to offset the broader economic challenges. The retail sector, which had previously experienced aggressive expansion, is now witnessing a slowdown as consumer spending declines.
