Indian Firm’s Kenya Low-Cost Homes Plan Faces Setback

Indian multinational Tata Group has suffered a major setback in its bid to build thousands of low-cost houses in Kenya after it failed to obtain free land for the project.

Tata Group, together with its compatriot Shapoorji Pallonji Group, has for the past year pleaded with county and national government officials for free land but so far no one has agreed to the proposal.

“Tata Value Homes planned to establish green townships near cities in Kenya and we held talks with several county governments that showed willingness to partner with us but none is willing to part with land,” Shapoorji Pallonji’s Ajay Anand told the Business Daily on Friday.

He said the Indian company was ready to “use our affordable technology to deliver thousands of homes for low-income earners.”

According to the official, the two companies are keen to build low-cost homes in Kenya on a tenant purchase scheme that will revolutionise the country’s mortgage market which currently boasts less than 30,000 borrowers.

“We are ready to partner with local banks in the housing projects but the government needs to come up with incentives that spur mortgage uptake,” he said.

In April last year, Tata Housing Development Company announced plans to raise Sh15 billion for residential and commercial properties in major towns in Kenya, Tanzania and several other countries.

The company said it had signed a deal with the Indian National Housing Bank and an undisclosed real estate developer to venture into housing projects in Kenya and Tanzania.

RELATED: Kenya’s First Land Bank to Fight Off Speculator

Tata said it was targeting to develop at least 4.5 million square feet of mixed-use townships in the two countries starting January 2018.

This is yet to happen.

However, the plan may materialize soon following the government’s recent announcement that it was in the process of establishing the country’s first-ever land bank to address the challenges faced by investors seeking to acquire land for housing projects.

The government is auditing State entities to establish those that hold more land than they need with a view to having the organisations release the surplus parcels to the land bank.

The creation of a land bank is seen as a great way to defeat speculators who sit on land, and then sell it for a profit – making it difficult for investors to develop low-cost houses.

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