NAIROBI COUNTY URBAN RENEWAL AND REDEVELOPMENT OF OLD HOUSING ESTATES. A case study presented at EAPI Summit at Radisson Blu on 25 th April 2018.

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1 NAIROBI COUNTY AND REDEVELOPMENT OF OLD HOUSING ESTATES A case study presented at EAPI Summit at Radisson Blu on 25 th April 2018.

2 OVERVIEW To transform Nairobi old housing Estates into modern and affordable houses to the residents 22% of Kenyans live in cities and the project will solve the housing shortage in Nairobi Lower income residents pushed out of the formal housing market and into the slums Improve dilapidated support infrastructure facilities in the old Estates

3 DATA ON THE ESTATES TO BE DEVELOPED ESTATES CURRENT USERS NO OF ACRES Suna Road (Toi Market) Open air Market 5 Acres Ngong Road Estate 96 County Staff Houses 21.5 Acres Old Ngara Estate 114 Housing Units 5.2 Acres New Ngara Estate 136 Housing Units 4.12 Acres Pangani Estate 48 Housing Units 5.2 Acres Jevanjee Bachelors Estate 80 Housing Units 7.56 Acres Uhuru Estate Green Field site 7.5 Acres Total No. of Households currently in the Estates are 438 on Approximately 51 acres of land

4 SITE MAP AND CURRENT STATE SUNA ESTATE SITE MAP CURRENT STATE

5 SITE MAP AND CURRENT STATE NGONG ROAD ESTATE SITE MAP CURRENT STATE

6 SITE MAP AND CURRENT STATE OLD NGARA ESTATE SITE MAP CURRENT STATE

7 SITE MAP AND CURRENT STATE NEW NGARA ESTATE SITE MAP CURRENT STATE

8 SITE MAP AND CURRENT STATE PANGANI ESTATE SITE MAP CURRENT STATE

9 SITE MAP AND CURRENT STATE BACHELOR S/ JEVANJEE ESTATE SITE MAP CURRENT STATE

10 SITE MAP AND CURRENT STATE UHURU ESTATE SITE MAP CURRENT STATE

11 DEVELOPMENT PRINCIPLES DENSIF ICATION: Highest and best use of land. Current use of land now on the Estates is 8 units per acre: COM PACT DEVELOPM ENT: Vertical development due to scarcity of land and to afford provision of green spaces in the new development. MIXED INCOM E GROUPS: To Cater to different income groups

12 DEVELOPMENT PRINCIPLES SELF RELIANCE Support services like playgrounds, schools, health facilities and community halls to be developed alongside. ENVIRONM ENTAL SUSTAINABILITY Use of green technolo gy & Energy conservation HUM AN CENTRED DEVELOPM ENT Start with their people and design and develop acccording to their needs

13 SOCIO-ECONOMIC BENEFITS PROVISION O F DECENT AND A FFORDABLE HOUSES F OR NAIROBI RESIDENTSTO BUY OR RENT E M PLOYMENT OPPORTUNITIES TO CITIZ ENS CONTRIBUTION TO K ENYA S GROSS DOM ESTIC PRODUCT CONTRIBUTION TO SOCIO- ECONOM IC DEVELOPM ENT

14 BENEFITS TO THE PRIVATE INVESTOR ACCESS WELL SERVICED LAND WITHIN THE CITY AT NO/MINIMAL COST ENABLED TO PROVIDE AFFORDABLE HOUSES TO A LARGER MARKET DEPLOY USE OF APPROPRIATE TECHNOLOGIES TO CUT COSTS BETTER RETURNS ASSOCIATED WITH ECONOMIES OF SCALE

15 BENEFITS TO THE COUNTY GOVERNMENT ACCESS TO PRIVATE CAPITAL AND EFFICIENT MANAGEMENT FROM THE PRIVATE SECTOR TO UNDERTAKE A COUNTY FUNCTION. OPPORTUNITY TO RENEW AND REDEVELOP THE DECAYING HOUSING AND OTHER INFRASTRUCTURE FOR BETTER SERVICES TO THE CITY RESIDENTS ACHIEVE HIGHEST AND BEST USE OF ITS PROPERTIES TO WIDEN THE BASE FOR RATE PAYERS INCREASE THE STOCK OF RENTAL HOUSING UNITS

16 JOINT VENTURE STRUCTURE Technical Partners: X% Stake Primarily in the form of technical expertise Minority Ownership or allocation of a % of developed houses County Government Long term lease of land Transfer of reversionary interest in exchange for shares Management Company (owns reversionary interest) Shareholding by buyers Shareholders agreement Consortium SPV Share Ownership Project Company SPV Sales Proceeds A) County Government Staff (County Government to best effort 50% offtake) B) Public Financing Partners: e.g. EPC - F Y% Stake Primarily in the form of cash EPC Contract Mortgages Financing Agreement Lenders EPC Contractor Lenders

17 INVESTMENT OPPORTUNITIES The Available Investment Opportunities The Opportunity Investor Role County Government Role Revenue Model Project Features Partner with the county government to develop affordable housing for members of the public and county employees as investor are able to access well serviced land at minimal or no cost Design, finance, construct and sell the housing units to members of the public and county employees thus accessing a market that is not well served by the current developments in the city due to the high prices of land. Provide land for construction and collateral purposes Improve support infrastructure Monitor statutory approvals for the new developments. Sale of housing units to members of the public and civil servants Salient features of the project : to develop at least 14,000 units and 5000 market stalls.

18 CHALLENGES ENCOUNTERED. 01 PRIVATE SECTOR MISTRUST OF WORKING WITH GOVERNMENT DUE TO PERCEIVED FAILURE BY GOK TO PAY CONVINCING THE EXISITNG TENANTS WHO HAVE BEEN RESIDENTS IN THE ESTATES FOR DECADES TO RELOCATE 05 LAND DOCUMENTATION POLITICAL ENVIRONMENT AND TRANSITION PROCESS 08

19 CURRENT STATUS OF THE PROJECT Land documentation and extension of leases completed for five of the Estates SPVs set up to start the construction of the Project GROUND BREAKING FOR FIVE ESTATES IN THE MONTH OF MAY 2018.