The greenhouse boom in real estate investments

Late last year, Property Realty Company paid investors Sh12 million as proceeds from agricultural produce from land in the Aberdares, Laikipia county. The produce, grown in green houses, was from parcels of land PRC had previously sold to clients.

According to the PRC founder and board chairman, Brian Gacari, 6,600 tonnes of tomatoes and capsicum were grown under irrigation by Green Arava, an Israeli firm. The produce was sold to learning institutions, hotels and various markets. Gacari says plans are underway to expand the venture from its current 70 acres to 300 acres by next year.

PRC is the pioneer of this method of investment, commonly referred to as greenhouses for real estate plots, in which land buyers who are not ready to construct immediately allow the seller to till and manage the plots instead of letting them lie idle. The seller, who acts as a property agent, takes over the farm management and decides the suitable crops to grow.

The client (landowner) literally sits back and relaxes as the developer does the land preparation for planting, daily management, harvesting and selling of the product. After the farm produce is harvested and marketed, the agent pays the client the stipulated amount of money through agreed terms and conditions. PRC recently rolled out another greenhouse project in Isinya, Kajiado County. The venture sits on 76 acres of land, with an eighth of an acre, complete with a greenhouse, going for Sh950,000.

Paul Nyanusi is a happy client who invested in PRC’s first venture: “I bought four eighth plots at the Aberdares, each for Sh249,000 and paid for six individual greenhouses each at a cost of Sh257,000. I also bought four shares for the group greenhouses each at Sh105,000 with an expected return of Sh300,000 for the individual and Sh120,000 for the group greenhouse.

PRC planted, managed, harvested and sold the produce and gave a cheque of over Sh2 million.” Another firm in this business is Diamond Property Merchants. Fred Onyancha, a branch manager at Diamond Property Merchants, says that they discovered that an investor could make money from their idle land and decided to use it as incentive to clients. “It is a win-win situation for both the client and the developer.

As we the property agent use it to attract more clients, those who invest earn income, which can even be used to offset building costs. Many people, especially the white collar class, would like to farm and earn from it but have no time to do it, so we sell them land and charge them an extra fee to make them farmers. You buy land from us, pay for a greenhouse and become a “sofa-set farmer,” said Onyancha. Diamond Property Merchants has an agribusiness package dubbed “Bethany City – The Agribusiness Haven” in Isinya and Kajiado towns.

The company has partnered with Nguzo International and SME Kilimo to do greenhouse farming for the company’s clients. For their Phase 3 project, an interested client purchases a minimum of one eighth of an acre (50 × 100 ft) at Sh450,000 and gets a greenhouse or two installed at a cost of Sh290,000 per greenhouse.

Phases one and two are in Isinya and are fully operational. They have an insurance cover in the event of crop failure, crop destruction or attack by disease, from which a client is compensated 75 per cent of the expected income. Daniel Kioko and nine of his chama friends are among those who have invested with Diamond Property Merchants.

“We bought an eighth of an acre plot in Phase 1 of Bethany City as a chama for Sh299,000 and paid Sh290,000 for a greenhouse. The property agent erected a greenhouse for us and planted cucumbers. Our crop is doing very well, it is flowering. We just visited last weekend. The company has been providing us with detailed information about the progress of our greenhouse through texts messages. We expect to harvest and get our first cheque of Sh200,000 in December,” said an elated Kioko. Kioko and his Jikoni Investors friends hope to buy more plots for each of the chama members.

Away from tomatoes and capsicum, and still under the greenhouses for real estate plots concept, at Urithi Housing Co-operative Society, it is a fish business, literally. The company has an ongoing project for fish ponds in Maragua. The project, started in April 2016, has over 100 fish ponds in greenhouses and sitting two acres.

A client can choose to own a pond for Sh250,000, or a portion of it for Sh85,000 with an expected return of 15 per cent of the investment. Other real estates companies that have adopted agribusiness plan are Stima Investments and Africa Plantation Capital.