Robert Muyela @PeopleDailyKe
High-end hotels and top holiday resorts have ceased being a preserve of the affluent suburbs of Kisumu town. Nor are they to be found in the central business districts (CBDs) of urban centres in the county.
Developers say residential areas close to cities and towns in the county are steadily becoming viable for the hospitality sector and investors in the hotel industry are finding such suburbs lucrative.
Dave Karia, the Managing Director of Lake Estate Agency Limited in Kisumu, says this is an emerging trend in the world of business and is being embraced by property developers so as to tap into the growing demand of executive hotel services near residential areas.
In Kisumu for instance, the drift has been noted in the suburbs of Milimani, Riat, near Robert Ouko housing estate and also around Kisumu National Polytechnic.
Milimani estate is home to Royal City hotel, Sovereign Hotel and Sunset. Riat, which is far from the city centre, boasts of the towering Grand Royal Swiss Hotel while Le Savannah hotel is just adjacent to Robert Ouko and highrise estates.
Poly View Hotel is one among the hotels that have developed near Kisumu National Polytechnic. “These areas have high population of people living in housing units either as tenants or as owners of the houses.
Many times they have excess guests who need accommodation or entertainment facilities, which has since attracted hotel business in their vicinity,” says Karia. Western Kenya Hospitality Leaders’ Association chairman, Robinson Anyal, says investors are putting up hotels within the residential set ups due to scarcity and rise in value of land especially in the CBD.
“These estates have turned into commercial zones in the recent past,” he says. Anyal says developers prefer going for cheaper land in the residential areas compared to within the CBD where prices have skyrocketed due to high demand. He advises that this is not the best idea for new investors intending to establish hotels and other accommodation facilities.
The Jambo Impala Eco Lodge manager said the beaches, which are well placed for establishment of hospitality facilities, have been evaded by developers because of high plot prices.
“Investors should think of putting up such investments along the lake shores, which gives the true picture of the outlook of Kisumu city to the incoming guests,” says Anyal.
Karia says a piece of land measuring 50ft by 100ft within Kisumu CBD could cost an investor up to Sh80 million while an acre of land in Milimani currently costs Sh100 million or more. “The investor will also be lucky to find an unoccupied plot on sale; chances to find land for sale within the city are dismal,” explained Karia.
Due to the limited space, construction cost within the city has scaled up as investors are compelled to first build underground parking lots. The design has to include a towering building with several storeys to maximise on vertical space to develop a structure that can meet the standards of a three, four or five-star hotel.
Karia says hotels outside the city, for instance the Grand Royal Swiss in Riat and Le Savvanah near Robert Ouko estate, have larger parking spaces for their guests. He singled out the three-star Imperial Hotel as among city centre hotels with limited parking space due to location in the heart of Kisumu city where business premises compete for space.
Despite space constraints, hotels in the CBD are attractive and key in entertaining guests on business-related visits. Milimani also hosts several offices, especially non-governmental organisations such as World Vision who have rented houses and converted them into offices, benefiting from cheaper monthly rent that range from Sh70,0000 to Sh150,000.
Karia laments that prolonged electioneering in the country last year, coupled with the capping of interest rates on loans offered by banks, dealt a hefty blow to real estate investors.
“Kisumu lost investments more than Sh2 billion which had been earmarked to facilitate development of residential and business housing units in Milimani by foreign investors,” he says. “The investors became impatient before the political stalemate could be settled and are yet communicate whether they have trashed the project or not.