Richest persons in Kenya: When Joe Mungai got a job at UN-Habitat, little did he know that the exposure would lead him to set up a multi-million real estate business.
As the secretary to the Governing Council and chief external relations and inter-agency affairs at the global body, he visited some of the world’s biggest urban slums in Asia and Africa. These slums lacked clean drinking water, toilets and were literally surrounded by desperation and crime.
“I came face to face with millions of people living in absolute squalor, without water, sanitation, infrastructure and security and I was greatly challenged by women entrepreneurs who owned some of the makeshift structures,” Mr Mungai said.
“I decided if such women with limited education backgrounds can make it, there is no reason why I should not do it better and in a bigger way.”
Mr Mungai knows firsthand what dire living conditions mean. He was born and brought up at Kaloleni Estate, in Nairobi. He says housing conditions at the estate were unbearable and he decided early on that he would want change, at least for himself.
When he left University of Dar es Salaam and got a job at the Ministry of Foreign Affairs, he immediately started saving to buy a decent house.
“The conditions at Kaloleni were unbearable and while most of my colleagues’ top priority was to buy posh vehicles, I opted to start saving for my dream house,” he said at his Haven Court office opposite Lions Place in Westlands, Nairobi.
“After one year, I bought a house at Nairobi West at Sh60,000,”
Getting such an amount those days, he says, was a tall order. He took a loan from Savings and Loans to purchase the house.
“A year later, I bought my second house at Loresho for Sh450,000,” said the alumni of Alliance Boys High School.
Although he initially wanted to improve his own life, his vision expanded when he joined the UN. The job at the global body took him around the world. This gave him an opportunity to learn more about housing in a wider context. He wanted to play a role in providing better housing and living conditions than the ones he witnessed in slums.
After working for close to 30 years at the UN headquarters, in New York, where he also studied at Columbia University, he returned home itching to jump into the housing business. He hit the ground running, selling some of his properties to raise capital.
Out of the Sh25 million he generated from the sale of his property, Mr Mungai used Sh16 million to buy half an acre in Nairobi’s Lavington. He then approached Housing Finance for a Sh97 million loan. He spent the money on putting up 20 apartments.
“The three-bedroomed apartments sold like a hot cake. Each unit was going for Sh7.5 million and this earned me Sh150 million,” said Mr Mungai.
Inspired by the good returns, he bought more land in Lavington and Kileleshwa before shifting gears to developing houses targeting low and middle income earners in Embakasi. The shift was motivated by his overriding desire to improve the living conditions for all.
CAST NET WIDER
The proceeds from his first project laid the foundation stone for Tamarind Properties, a real estate firm that specialises in building houses for low and middle income earners. Mr Mungai runs the firm with his son Brian Mungai.
The enterprise has grown rapidly and now boasts several projects under its stable. These include Tamarind Court and Tamarind Gardens in Lavington, Evergreen Court in Kileleshwa and Tamarind Meadows on Mombasa Road.
He is also the proprietor of a multi-million shillings project in Embakasi comprising 850 units. The project, Tamarind Valley, also has a shopping mall.
Mr Mungai is now casting his net wider. He has set his sights not only outside Nairobi but across the region. He is implementing a Sh1.2 billion project, Nakuru Meadows, which will comprise 150 maisonettes and town houses.
Richest persons in Kenya: COST OF LAND
Tamarind Properties’ apartment prices range between Sh4 million and Sh12 million. Mr Mungai says the prices of houses have sharply increased since 2006 when he started the business. The huge increase, he says, is driven by the cost of land, which has gone through the roof.
“When I started I bought half-an-acre at Sh16 million at Lavington. Today, nine years down the line, the same piece of land is going at between Sh200 million and Sh300 million,” the father-of-three says.
“In Eastlands things are not any better. An acre that used to go for Sh3 million is now selling at between Sh25 million and Sh30 million and this is what is pushing the prices of the houses up.”
He said ordinarily a three-bedroom house in low- and middle-income areas should be sold for Sh2 million but due to lack of infrastructure, water, electricity and sewer the units are going for between Sh8 million and Sh10 million as developers are forced to pass the extra cost to the buyers.
Richest persons in Kenya: REGIONAL MARKET
Tamarind Properties is also eyeing the regional market and already it is in the initial stages of entering Uganda.
“We’re in the process of acquiring 25 acres within the suburbs of Kampala where we’re hoping to build about 88 houses and hopefully after the legal documentation is complete, the ground-breaking will be done in August,” said Mr Mungai, adding that Uganda real estate market is still a virgin.
The developer is also in the process of acquiring 50 acres off Thika Superhighway to construct between 1,200 and 1,500 units that will see his business empire firmly enter the billionaire’s club.
This feature was first published in the Daily Nation.