HOUSING

Purple Haze developer optimistic in tough real estate market

In Summary

•The Sh4.5 billion project that sits on a 2.5 acre piece of land is targeting upper middle class buyers

• Residential rental yields grew by a marginal 0.2 percentage points to 4.9 per cent in the first half of 2019.

NEW HOMES: A house under construction
NEW HOMES: A house under construction
Image: FILE

The developer of Purple Haze Residences is optimistic about the development’s occupancy despite subdued rental yields in Nairobi’s real estate market.

The Sh4.5 billion project that sits on a 2.5-acre piece of land is targeting upper middle-class buyers either looking to buy a home for personal use or as an investment.

“A good product can always be able to sail through hard times and our product has all the features one would desire to have more so in terms of requirement and luxury,” Purple Haze director Mavji Varsani told the Star.

Last month, a report by Cytonn Real Estate showed for the first half of the year, residential rental yields grew by a marginal 0.2 percentage points to 4.9 per cent compared to 4.7 per cent the same period last year.

This according to investment analysts at Cytonn was a result of oversupply and limited access to credit.

“We retain a neutral outlook for the real estate sector mainly constrained by increased supply in the market and limited access to financing for both developers and off-takers. Pockets of value remain in housing for lower-middle to low-income earner,” said Cytonn Research Analyst Juster Kendi.

According to Varsani the project, which is due for completion in September, is expected to rake in an 8-11 per cent return on investment.

The developer has already partnered with the Commercial Bank of Africa (CBA) to offer aspiring homeowners a mortgage facility of up to 105 per cent of the asking price.

The payment plan will include a 20 per cent deposit, 80 per cent handover and a 10 per cent discount for cash buyers.

The development contains 216 units comprising of 12 penthouses with 3-bedroom duplex units with a starting price of Sh70 million and the 4-bedroom duplex units with a starting price of Sh78 million with all additional servants quarters attached.

''Each apartment features a self-contained, detached servant quarter, a top of the range European finishing combined with artisanal workmanship which brings out the true design elements in this project,” Varsani said.