Aerial view of Nyeri town (PHOTO:Kibata Kihu/Standard) Once devolution was embedded in the 2010 Constitution, Nyeri County was ripe with expectations that real estate development would rise. Considered a strategic region in Central region – having been the provincial headquarters in the previous administrative structure – Nyeri was viewed by investors as having potential for high returns. A Cytonn Investments report titled, Nyeri Real Estate Investment Opportunity, said the property market was driven by emerging housing demand, devolution, positive demographics and improved infrastructural development. But a walk around the county’s major towns such as Nyeri, Othaya, Karatina and Chaka reveals little has changed in terms of new commercial spaces despite the initial boom. The central business districts of these towns are dotted with buildings that were built in the early 1970s and remain unchanged as their owners are reluctant to restructure or sell the property. Ndegwa Mureithi, the vice chairman of the local Kenya National Chamber of Commerce and Industry branch, said one of the reasons the towns are slow to grow is that most of the buildings are family owned. “These firms are run by patriarchs or matriarchs who are unwilling to make risky investment decisions without guaranteed returns, especially where land is concerned,” he said. New tenants are also compelled to pay ‘goodwill’ for commercial space, which is often quite high. Goodwill is a specific non-refundable sum given to the landlord by a tenant before occupying rental space. At times, the tenants are asked to deposit up to six months’ rent and a goodwill of up to Sh1 million. “Goodwill is legal but in the case of Nyeri landlords, it has been misused. Often it has become a barrier to trade and should be discouraged because it increases the cost of starting a business in these towns,” said Mureithi. However, this is a prerogative of property owners which leaves most businesses at the mercy of landlords. When Rose Njogu was searching for space to set up a fruit stand, she came face to face with the prohibitive nature of the goodwill after one landlord asked her for Sh100,000 for a small stall. “My business only needs one room and access to clean water. I would rather sell my fruits on the streets than pay that amount, I only had capital of Sh20,000,” she told Home and Away. Informal agreement Nyeri Lands, Housing and Physical Planning Executive Kwai […]
