In this week’s Investing Like an Executive series, Andrew Barden engages in a conversation with Samuel Kariuki, the CEO of Mi Vida Homes. Established in 2019, Mi Vida Homes is a residential developer with the mission of addressing the scarcity of affordable middle-income housing for families.
Mr. Kariuki took the helm of Mi Vida in January 2022, bringing with him a wealth of experience across various sectors, including consulting, private equity and real estate.
Inside Scoop on Mi Vida Garden City
Mi Vida Garden City is the flagship project for Mi Vida Homes. Nestled within a 48 acre mixed-use development off of Thika Highway and integrated into the Garden City Mall complex, the space is perfect for someone seeking a balance of work, life, and leisure.
Mi Vida Garden City has completed the first phase (340 units with ~85% sold to-date) of its development and is soon preparing to break ground on the second phase of its mid-market facilities which will boast the name Ameiya by Mi Vida. Beyond this, the development includes an array of top-of-the-line amenities including a large swimming pool, running track, basketball court, and a fully-furnished gym, just to name a few.
ALSO READ; Mi Vida Homes Partners with Institutional Buyer for 30% of 237 Garden City
“The concept of Garden City Living means that when you buy a home here, you get access to so much more than your space, you also get access to a community. We have designed our facilities around the live, work, and play concept… Residents also get access to two parks totaling 4 acres of green space. One of the things we want people to understand about Mi Vida Garden City is that they are also getting a balance of living and green space,” stated Mr. Kariuki.
Navigating Challenges in Real Estate Development: Mi Vida’s Approach
Across Africa, there exists a growing demand for middle-income residential properties. However, not all developers can meet this demand, primarily due to the lack of suitable finance mechanisms to power their projects.
Some property developers have devised alternative financing models to cater to the growing demand for housing. One such model is off-plan investing, wherein prospective homebuyers can acquire a house before its completion, secure in the knowledge that it is more cost-effective compared to purchasing a fully finished house at the prevailing market rate.
Unfortunately, the real estate sector in Kenya has suffered from a loss of credibility in recent years, leading to a decline in investor confidence caused by undercapitalized developers. Mi Vida’s approach is bringing a reputation and structure where investors can have peace of mind and trust that their asset is secure and provides ample opportunity for owners to seek a return on their investment.
Mr. Kariuki emphasizes, “[Mi Vida] never initiates a project and our board ensures that no projects begin, unless we can unequivocally demonstrate its funding right from the outset.”
Mi Vida Homes boasts the backing of large, highly-capitalized partners with a plethora of experience across Africa and Asia. Mi Vida is a partnership between ACTIS, a real estate private equity investor-developer focused on sub-Saharan Africa, and Sharpoorji Pallonji Real Estate (SPRE), the real estate arm of one of India’s largest conglomerates.
Advancing Affordable Housing: A Collaborative Approach
Affordable housing is a core tenant of Mi Vida Home’s mission. It is clear that this mission requires a multitude of different industry stakeholders.
The Kenya Mortgage Refinance Company (KMRC), a collaboration between the Treasury and private lenders, is one way Mr. Kariuki envisions homeownership becoming more feasible for Kenyan citizens. Having close relationships with an array of lenders and the KWRC, Kenyans seeking residences within Mi Vida’s Garden City properties, can better access the finances to make the dream of home ownership a reality.
Generating Profits from Your Real Estate Investment
According to Mr. Kariuki, there exists a range of avenues for achieving favorable returns from your real estate investments. To begin, when a buyer acquires a property from reputable developers during the off-plan phase, an opportunity emerges to realize profits through capital gains, contingent upon the project’s completion within predefined timelines.
Simultaneously, property owners have the potential to generate income by leasing out their unit(s). Moreover, if they opt to furnish the property, the potential for earning annualized returns of around 16% to 17% becomes more achievable.
Furthermore, astute real estate investors in Kenya are capitalizing on Airbnb and other platforms to tap into the short-term lodging market. Mr. Kariuki holds the belief that this presents a noteworthy opportunity for those seeking to maximize their real estate investments.
ALSO READ; Investors are leveraging Airbnb to chase returns in the Kenyan real estate market
Concluding our discussion, Mr. Kariuki gave some words of advice for young people starting their career journey: “Real estate is similar to many other career pursuits. To be successful, one must obsess and learn as much as they can about the subject-matter. One must immerse themselves in the knowledge where they can transition from a novice to a master.”
