HOW TO GET 100% FINANCING FOR YOUR HOUSING CONSTRUCTION PROJECT IN KENYA.

HOW TO GET 100% FINANCING FOR YOUR HOUSING CONSTRUCTION PROJECT IN KENYA.

Construction financing is a challenge to many land owners in Kenya.
Many land owners and developers would like to construct houses for sale but the limitation usually comes due to lack of finances.
Kenyan banks require that the land owner finances the consultancy fees, marketing and sales fees and bank interest.
All the above usually form an approximate of 15% of the total construction cost but varies from project to project depending on the scope.

HALF ACRE PLOT EXAMPLE

A half acre plot in a middle income area such as Ongata Rongai to be constructed with maisonette type units will cost approximately KES 80 million in total including cost of land purchase. Therefore, 15% of such a project is around KES 12.5 million.
After raising this amount, the banks require that the land owner or developer now raises a further 15% in terms of hard cash into the actual brick and mortar construction project.
This requirement has locked out many potential developers due to the high amount.

SOLUTION.

a4architect  has worked out a solution to this.
a4architect  offers equity contribution in terms of professional services namely Architecture, Quantity Surveying, Structural Engineering, Electrical engineering, Civil Engineering, Mechanical Engineering, Legal services and Sales and Marketing.
a4architect works out a Joint Venture/agreement with the land owner to offer part of these professional services as a contribution so that the land owner can reach the 15% project value contribution.

JOINT VENTURE WITH FINANCIERS

Once the land owner/developer’s equity reaches 15%, a4architect then organizes for a Joint Venture with financiers.
Financiers offers a further contribution of 15% of the total project value as contribution.
Once the land owner/developer’s contribution now reaches 30% [15% from land value+a4architect consultancy contribution AND 15% from financiers, local banks can now be approached to finance the balance of the construction project.
This way, the land owner can now get funding for their project with their only contribution being the value of their land. Consultancy fees are offered by a4architect at no initial cost to the land owner/developer.

SPECIAL PURPOSE VEHICLE

Once the land owner/developer contributes their 15% of the project value with the assistance of a4architect, financier forms a SPV which is a company owned jointly by financier and the Land Owner. The land ownership is now transferred to the SPV.
The SPV develops the project and at the end of the project, the profits realized are shared between financier and the land owner/Developer.
At this stage, a4architect receives monies that it had contributed to the land owner/developer initially.

CONCLUSION

The land owner/developer will now have realized profits from the sale of units with their only contribution of land.
For more information, contact  www.a4architect.com.

Francis Gichuhi Kamau.
Architect.
PRISM DESIGNS AFRICA.
www.a4architect.com
+254721410684

Francis Gichuhi (692 Posts)

Architect Francis Gichuhi . B.Arch. University of Nairobi. Registered Architect, Kenya. Member, Architectural Association of Kenya. Contacts. email info@a4architect.com. Telephone +254721410684


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  18 comments for “HOW TO GET 100% FINANCING FOR YOUR HOUSING CONSTRUCTION PROJECT IN KENYA.

  1. Reuben
    February 16, 2012 at 7:08 pm

    dear francis, we spoke abt the plots in Katani. They are 50 by 100 and in the lower end of syokimau in betwicht ruai and the airport. I wd like to do residential flats.
    ThX reuben

    • February 17, 2012 at 7:47 am

      Hi Kyalo. We can work towards a phased construction based on the diamond house-see here
      http://www.a4architect.com/diamond-house-plan-cost/

      This way, you will not require financing to construct and you can construct bit by bit based on your financial ability.

    • stella chepkemboi
      June 22, 2014 at 9:43 am

      would like to know if the same is possible for hospital construction.

      thanks.

  2. Mathenge Murugi
    February 19, 2014 at 7:44 pm

    I own a half acre plot which is three kilometers from Nyeri town.

  3. jane Maingi
    June 7, 2015 at 3:46 pm

    1. I have 2 acres near the new Kwale International Sugar Factory. i wanted to do residential since there are no houses for the sugar workers.

    2. I also have 3.5 acres near the technical university of Mombasa satellite campus at Mabikoni in Kwale. wish to do student hostels since the campus has no hostel

    NB: In all the above projects i need the 100% financing. can we partner?

  4. THUKU ROBERT
    August 21, 2015 at 1:58 pm

    jambo,have an1/8 ac within nyeri municiparity have done foundation of a four[4]storey building but got stuck,the BQ is ksh.64m,how can i get assistance to finish the project

  5. john nyingi
    May 26, 2016 at 12:35 pm

    i have a plot at ruiru 2km from town size 45ft by 80 where i would like for financier to construct a rental units the are rental houses are in demand

  6. Omar
    September 11, 2016 at 10:14 pm

    How can I qualify for 100% finace for consruction of residencial flats at the heart of mombasa island…

  7. Peter njuguna
    November 2, 2016 at 1:21 pm

    Hi my name is Peter njuguna I have a plot in nakuru town measuring 80×100 I wanted to build rental house’s I have done most of the work but the construction has not started coz of lack of money how can I get assistance

  8. David Ambayo
    November 7, 2016 at 11:27 am

    hi we have a plot in wangige lower kabete would like to do residential houses the size is half an acre,funds for biulding is the problem can we get a joint venture we provide the land.
    David

  9. Maureen 6
    November 23, 2016 at 11:24 am

    Hallo please I need detail I have 40 by 60 in joske I need to build something

  10. Eric N
    December 1, 2016 at 5:46 am

    Hello,
    I have a plot in located along thika road, car wash area close to githuai 45..about 200 meters from the highway, 80 by 100..would love to do residential house but finances are a very big problem. Kindly advise on the 100% financing.

  11. johnson
    January 18, 2017 at 9:18 am

    I am Johnson , have .375 acre plot at mavoko and I am seeking for partnership to develop residential flats for sale ,please assist

  12. Charity
    June 12, 2017 at 8:45 pm

    Hi, I have a plot of land near the laikipia university. I would like to build 20 one roomed flats with toilet and kitchen. This is for rental by the university students. When can you come and visit my site?

  13. danson
    July 18, 2017 at 4:41 am

    Hy I have aplot in Weteithie thika which is 3 million work done and it requires 23 million to comprition .how can u assist .

  14. Jeff
    August 3, 2017 at 3:16 am

    Hi, I’m here and I need Plot 50×100 Ruai, josca, and kamulu, how can we help one another

  15. October 3, 2017 at 9:46 am

    I have got an 1/8 at Santon mwiki,300m from the main raod and would like to bring up some residential apartment.kindly assist to get the 100% financing

  16. November 2, 2017 at 2:09 pm

    I have a prime plot in Kabarnet, kindly call me through 0712498000 for a further discussion. Thanks

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