China firm pours big cash into Nairobi real estate

Chinese firms are increasingly expanding into Kenya.
Chinese firms are increasingly expanding into Kenya. PHOTO/FILE
Chinese construction giant China Wu Yi will spend Sh3.8 billion to set up a construction factory in Nairobi as it seeks to grow its influence in Kenya’s real estate sector.

The firm’s board of directors has “after careful consideration” approved a resolution that will see its local subsidiary China Wu Yi (Kenya) Ltd investing Sh3.8 billion (250 million yuan) in the factory.

“The investment has been signed out to the Kenya subsidiary China Wu Yi (Kenya) Ltd in the Kenyan capital of Nairobi across the building and construction industry,” the company said in a statement.

“The plant covers 177 acres with total investment of about 250 million yuan.”

The project will be funded by Chinese lenders, and will involve construction of an industrial base for research, production, marketing and display of prefabricated materials.

China Wu Yi is already a key player in the Kenyan construction sector, where it oversees billions of shillings worth of mega projects in shopping malls and highway construction.

Last year, the company won four local tenders worth a cumulative Sh10 billion – one of them involving construction of a shopping mall, office and apartment buildings with total floor area of 48,000 square metres in Meru town.

The Chinese firm joins its compatriots Boleyn Magic Wall Panel Ltd and Blue Sky International, which have recently expanded into Kenya in a bid to meet the rising demand for modern ‘low cost’ building materials.

Boleyn Magic Wall Panel Ltd, which completed construction of a Sh3 billion precast concrete plant in Kitengela, is already establishing itself as a major supplier of wall panels, hollow-core flooring slabs, columns and pressurised beams in the country.

The firm is now seeking approval to build a similar plant in Kisii to ease supply of it materials to western Kenya builders.

Blue Sky International, which specialises in affordable building solutions, is setting up a Sh1 billion prefabricated panels factory in Athi River, Machakos County. The factory will on completion manufacture prefabricated panels for commercial industrial and high-rise developments.

The firms are betting on prefabricated building technology, which is billed as a faster mode of construction with the potential to cut costs by up to 30 per cent.

Local property developers are increasingly embracing alternative building technologies as they seek to lower costs and maximise returns.

The expandable polystrene system (EPS) is especially winning the hearts of investors as it provides strength, durability, faster and cheaper construction in comparison with brick and mortar – with no wastage of materials.

Being an inert material, EPS panels do not rot. They have no nutritional value to vernim and thus do not attract termites and other pests, making the building more durable.

The technology is popular in South Africa, Italy, Indonesia, Malaysia, United Arab Emirates, Mexico, Panama, Venezuela and Romania. Locally, the technology is being marketed by the National Housing Corporation (NHC) among other private firms.