NAIROBI METROPOLITAN REGIONKIAMBU COUNTY TITLE OF INVESTMENT CONSTRUCTION

NAIROBI METROPOLITAN REGION-KIAMBU COUNTY TITLE OF INVESTMENT : CONSTRUCTION OF AFFORDABLE HOUSING-MIXED USE DEVELOPMENT

BACKGROUND • Nairobi Metropolitan Region (NMR) extends over 32, 000 square kilometers and comprises the jurisdiction of Nairobi County, Kiambu County, Machakos County and Kajiado County. • The 2009 population and housing census the NMR had a population size of 6. 65 million. Majority of the population is concentrated in Nairobi and Kiambu Counties. The NMR is projected to grow to 8. 6 Million people (2012), 11. 8 Million people (2022), and 15. 3 million (2030). • NMR is the most urbanized region in Kenya and still urbanizing fast especially with the growth of populations in the satellite towns. Kenya will be 61. 5% predominantly urban population. It is estimated that the NMR will accommodate a bulk of this population

BACKGROUND CONT’ Kiambu County is located in the Central highlands of Kenya in the former Central Province, close to Kenya's capital, Nairobi (14 Km from Nairobi CBD) and a part of Nairobi Metropolitan Region. It is one of the wealthiest counties in Kenya with a GDP per Capita of USD 2, 925. 6 and an annual budget of USD 152 Million. It covers an area of 2, 543. 42 square kilometres with a population of 1, 623, 282 (2009 Population Census) and a projected population of 1, 921, 392 in 2015, and 2. 3 Million in 2018. It is a leading innovative commercial hub that shares its borders with five other counties; Nakuru and Kajiado to the West, Murang'a and Nyandarua to the North and Nairobi to the South. Economically , the NMR area generates 50% of Kenya's Gross Domestic Product

Nairobi Metropolitan Region map

Problem Statement • Rapid urbanization and population growth due to increased urban sprawl leading to encroachment into agricultural and water catchment areas. • Inadequate housing infrastructure and mushrooming of informal settlement. • 70% of the Kenyan Economy is informal which is characterized by informal markets. • Haphazard, uncoordinated and incompatible urban and rural development. • Poor provision and inadequate infrastructure and utility services. • Poor and inadequate community and social services leading to increased social crimes, outbreak of diseases such as water Bourne diseases. • Environmental degradation and poor sanitation. • It is estimated that the shortage of affordable/low cost housing is 200, 000 units annually. A majority of which are in NMR region. • All these have necessitated the formation and implementation of the Government of Kenya Big four agenda namely; Affordable housing, Food security, Universal Health care and Manufacturing sector

PROPOSED SOLUTION Kiambu County intents to undertake a land redevelopment program in its old municipal housing The approximate are is 50 Acres of Land own by the County. The County Government has signed a memorandum of understanding with the National Government to initiate the process of generating private sector finance under public private partnership. The County Government will provide land while the National Government will provide uptake guarantee to potential investors in a 3 to 5 year plan. The project targets home owners locked out by the private supply market earning USD 200 -1500 currently living in semi informal unauthorized structures. The Mixed use component will provide a place to live, work, play and reduce the need to travel thereby reduce congestion in the city of Nairobi and formalize the informal trading activities by creating shopping malls, markets and centers.

PRIVATE CAPITAL OPPORTUNITIES The County Government is looking for potential private investors with financial capacity and knowledge to undertake the project through a PPP. The County Government will provide Land, and all necessary regulatory approvals and further secure necessary uptake guarantees from the National Government for the Construction of the project. Real estate data for the supply of houses shows that the County has one of the highest rental yields of 7. 5% from an average of 5. 6% in its three of the six municipalities with the highest rental yields of 11% and 10% in Ruiru and Karuri respectively.

PROJECT NUMBERS The County Government intents to construct 13, 000 housing units in 1, 2 and 3 bedrooms average size 45 Square Metres and the markets estimated sizes is 60, 000 Square Metres. 1, 300 units to be allocated to the County for public housing to house the current tenants The average project cost USD 193 Million The County Government : Will provide Land valued at USD 100 Million Provide trunk infrastructure including sewer line, roads and street lights to this end the County Government has already secured USD 189 Million through the World Bank under the KUSP Program for infrastructure development in its major urban areas some of which can be channeled to the proposed project sites. The investor can construct 30% of the units and sell them at market rates The County Government will play a regulatory role to protect the markets from informal intrusions and guarantee security of rental income

PROJECT NUMBERS Contribution by the Private Investor Development Value - USD 335 Million Development Cost – USD 223 Million Profit –USD 112 Million Operate the market for free Gains by the County Government Land Value Capture- Increased property rates /regenerate the area Increase d economic activity/employment/business licenses etc. 60, 000 Square Metres Market Space Market rental revenue from the Markets Private partner to operate the market for free Controlled and managed urban sprawl Social security to citizens

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