New York-based equity firm Milost Global Inc. has become the latest foreigner to make a foray into the local market following the signing a multibillion shilling deal with one of Kenya’s largest real estate developers – Kings Pride Properties – to implement projects to plug the housing deficit.
Under the deal, which was inked in November, the two organisations will establish a special purpose vehicle (SPV) that will oversee the implementation of Sh45 billion worth of real estate projects across Kenya starting this year.
Milost will spend Sh15 billion to buy a stake in Kings Property Pride, while the remaining Sh30 billion will be a loan to help the local real estate firm complete several on-going developments and launch new ones targeting low-income earners.
“With 61 per cent of urban households still living in slums and an urbanization rate of 4.4 per cent, Kings Pride Properties is sitting in a huge market,” he said adding that Milost will use its partnership with the local firm to expand into other regional markets with Kenya as its launching pad.
Kings Pride CEO David Karau said the partnership will make the company’s houses more affordable since they will not be funded through expensive bank loans.
“Players in the market know how securing financing locally has become very scarce and expensive. This goes all the way into project execution [making homes] unaffordable to the end user,” he said.
“We hope [this partnership] comes in as a solution to our property development agenda.”
Milost’s entry into the Kenyan market comes at a time when the government is planning to launch its first Public-Private Partnership project that will establish a mass housing production model to be rolled out countrywide.
In October, Housing and Urban Development principal secretary Moses Nyakiongora said a total of Sh1 trillion will be spent on construction of over a million low cost homes in five years to help ease the national housing deficit that now stands at 1.85 million units.