Wednesday, 4 November 2015
Investing in Kenyan Property - New Hotel phenomenon set to sweep the Kisumu
Interest in the Kisumu hotels sector has increased significantly in the past two years following many years of intermittent development and association with other shared ownership vehicles, says one of the realtors in Kisumu county in her recent report: ' Hotels-The Kisumu Latest Hotel Phenomenon'
A complex hotel is a hotel operating unit which is sold to individual equity investors, where each owner acquires a room, suite or studio whilst the whole enterprise is managed as a hotel operation under a single brand.
Buyers own their units the same as regular apartments. There is no time limit to ownership. All apartments come with either freehold or lease hold title deeds. These hotels model are similar to the serviced apartment or apart hotel sector and is suitable for an investor who wants to test the water in hotel investment.
We are seeing more and more sophisticated customers coming to the market and a change in demand patterns; the traditional timeshare products seem past their prime. This, plus an increase in investment appetite for the hospitality sector, suggests that the condominium market looks set to grow. Many international hotel brands have also declared that the Kisumu hotel landscape is ready for cooperative hotel developments, either in conjunction with self-contained hotel operations, as fully self-contained apartment’s plans or as a part of a mixed-use development plan such as the Nairobi Brand.
Cooperative hotels are significantly less developed in the Kisumu than in the capital of Kenya, in part owing to a low cost residential focused market as well as the lack of development in the hotel sector since the colonial period.
Alternative hotel ownership are featuring more and more in the hotels sector, with the rise of cooperative hotels and a shift in investor strategy, thus creating a new investor profile. At the moment, the Kisumu apartments market is being targeted and driven by private retail purchasers, typically reasonably net worth individuals attracted by a city center or a resort investment foothold although we are now seeing more and more first time property buyers moving into the Cooperative Hotel marketplace.
Mamboleo and Riat are particular favorites as an investment destination. There is room for a wider pool of institutional and real estate investors to invest in a portfolio of apartment units or the establishment of an investor-developer partnership.
A lot of this interest is being driven by the relatively cheap market prices in the Kisumu compared to Nairobi, especially Kenya Housing prices, and the easy payment options available for our Hotel Developments, but there are other factors, too. Offshore Property Investors, Foreign baby boomers as well as coast side Mombasa, are looking for ways to maximize their return on investments as they approach retirement, and so are purchasing second homes, particularly Hotel Investments where they can use the apartment for vacations and rent it out through our In-House Hotel Management when they are not using the unit thereby gaining rental incomes that on today’s purchase prices, give a projected on their investments of some 12-16% depending upon the mode of payment for the unit.
www.kenyan-real-estate.com for more informative tips.