Mixed use real estate termed ‘ego projects’

Apartments at the Garden City Mall in Nairobi. The development on Thika Road has been recognised among top building projects that have put Nairobi on the global map. FILE PHOTO | NMG A construction management expert based in South Africa has urged investors to have “clear insight” into the expected market demand of billion-shilling mixed used developments (MUDs) while terming some mega projects in Nairobi and Lagos as “ego projects”.

A mixed-use development (MUD) refers to a real estate projects with more than one main theme or use. For instance, such projects can have residential, retail, office, and hospitality, all in one location.

Without identifying the “ego” projects, Profica Group chief executive Tim White pointed out that some high-rise towers in Nairobi made limited financial sense and did not observe property investment fundamentals which has seen them take a long time to achieve success.

“We must understand the objectives, purpose and functionality of mixed-use precincts and how they actually work. Our clients and investors require their developments to be financially viable and they need to be planned with return on investment in mind,” he said.

“Financing a multi-phased MUD, addressing environmental, transportation and infrastructure issues and having a clear insight into the expected market demand for a mixed-use development are some of the challenges that must be tackled in a collaborative master plan,” says White.

Latest surveys by several realtors have however identified Nairobi as an attractive MUD location with Kilimani, Westlands, Gigiri and Ruiru as well as Limuru, Nakuru and Mombasa roads emerging as favourites.

According to real estate firm Knight Frank, Nairobi’s mixed use projects have placed the capital among key global cities where such schemes are reducing the overall commute time.

It named Garden City by Actis on Thika Road, Centum’s Two Rivers development and The Pinnacle in Upper Hill as projects that put Nairobi on the global map.

Others are Le Mac in Westlands, Yaya Centre in Hurlingham and NextGen along Mombasa road.

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