Properties on Auction Kenya: The real estate sector in Kenya has been sailing in troubled waters. And as the troubles persist, auctioneers have been struggling to get buyers for repossessed properties.
Of the hundreds of properties on auction – on the back of a slowing economy – only a handful have found buyers. The most affected are high-end properties.
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Together, auctioneers have tried to dispose of houses – both residential and commercial – whose value could be running into billions of shillings. In the month of January alone, one of the largest auctioneers put up for sale property worth Sh. 5 billion.
“There are instances where the auctioneers have not found anyone willing to bid above the reserve price. Garam Investments Managing Director Joseph Gikonyo, whose firm is auctioning properties worth billions of shillings this year, said out of 10, only one property is finding a buyer. He pointed to a bad economy and struggling businesses owing to high tax rates,” says a report that appeared in The Standard.
Among the houses that stand out and have been put up for auction in the recent past include a section of Nextgen Mall along Mombasa Road, the Nairobi Upper Hill Hotel and a three-bedroom villa at the prestigious Great Rift Valley Lodge where a unit can go for Sh. 50 million.
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Others are Thika Business Centre (whose anchor tenant is Naivas Supermarket) estimated to be worth Sh. 540 million, and a penthouse at The Mirage in Westlands that can fetch Sh. 48 million under normal circumstances.
Apparently, household goods like cookers and fridges are the only fast-moving items at the auctions. “A limiting factor for the auctions however could also be a recent law that seeks to protect property owners, dictating that property sold at auctions cannot be sold at under 75 per cent of the market price. Out of 10 auctioneers are only managing to sell one whereas in the past they used to sell up to seven.
Properties on Auction Kenya: Parts of this report first published in The Standard.