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East African satelite cities shaping Real Estate industry

22 June 2015, 15:00 Rading Biko

Nairobi - East Africa is the new El-Dorado when it comes to mineral explorations and every multinational company is rushing to get a piece of the pie.

But the real estate has not yet developed at the same rate as the rest of the world.

Whereas more than 50 percent of the world’s population now lives in cities, most East African countries will only reach an urban population of 31 percent by 2030 according to a report by the State of East Africa 2013 from the Society of International Development.

The report projects that the 20 fastest growing cities are within the East African region, with Kampala leading the way at 99.5 percent followed by Dar Es Salaam at  85.2 percent, Kigali 79.9 percent, Mombasa 79 percent and Nairobi 77.3 percent.

These cities are being built to deal with growing population and the urban boom being realized by the growth in the economy.

A few years ago, the East Africa member states; Kenya, Uganda and Tanzania proposed to build four satellite cities to ease the pressure on their capital cities.

Kenya proposed to build Tatu and Konza technology cities outside Nairobi, Tanzania proposed to build Kigamboni adjacent to Dar es Salaam while Kakungulu city in Kampala was in their plan.

In Kenya, developers and the government are partnering to come up with satellite cities that will help decongest the capital city, Nairobi.

The recent trend of satellite cities in real estate improves investment on amenities in the area and people do not have to rely on the capital city but venture into other cities in the country.

The mini-city coming up in Limuru, within Kiambu County is Tilisi. The plan was started two years ago in preparation for vision 2030. The project will cover 400 acres and is projected to turn the area into a world class residential and commercial area.

According Lamudi Kenya Managing Director, Dan Karua: “Satellite cities are mainly started due to demand from business developers in a certain area hoping they will solve aspects like urbanization and create modern cities that will complement the development of the country. The towns outside Nairobi are growing very fast and turning them into satellite cities is just one of the solutions for development.”

Karua added that Konza city and Tatu city are also coming up and will help with spreading the population in different areas in the country.

Tilisi will touch on all the pillars of Kiambu County by constructing educational institutions, residential blocks, playgrounds, a police post business blocks and a medical centre.

All these ensure that the area is a one-stop-shop for day-to-day activities.

This project will also boost the real estate market in the area as people working here will be looking for housing, this means more investment opportunities especially for residential properties.

There are also some big projects coming up in the area that have started creating the change that is expected. Malls like Two-Rivers, Riviera and Village Market are attracting international brands and the middle class to upper class in the area. This is just to pave way for mini-cities like Tilisi.

People in Kiambu County are looking for affordable yet beautiful housing that can fulfil the basic needs like security, water and convenience according to Lamudi Kenya report of 2014.

The report further indicates that 70 percent of the population in Kenya is expected to live in urban areas like Kiambu by 2050.

Benefits of satellite cities

According to the real estate experts satellite cities hope to tackle the urban congestion by accommodating urbanization and creating modern cities to complement development.

They also seek to embrace their respective countries' advantages. For instance, Konza City in Nairobi, Kenya is a multi-billion dollar ICT city park.

The  Permanent Secretary in the Ministry of Information and Communication expects Konza City to be Africa’s home of computerization, the equivalent of Silicon Valley in California, complete with skyscrapers, business centers, international schools and hospitals. It is no secret that Nairobi aspires to be the technology hub of East Africa.

The satellite cities will help bring urban services closer to residents and consequently decongest the city center. This strategy implies that the only way to improve city conditions would be to have less people traffic. Perhaps only then can authorities focus on developing the original cities.

According to the State of East Africa 2013, most governments must find a way to balance the interest of those living in the satellite cities to those in the mother cities.

Most of the satellite cities are geared towards a certain class of people, and this is clearly marked by the potential costs of living and working within these cities.

As the report indicates, "The poor and weak populations in the mother cities face an increased risk of further marginalization and impoverishment.

"The mother cities would be left with drastic economic and even human capital loss. For instance, skilled and qualified workers would migrate to these satellite cities for a chance at sustainable and well-paying jobs.

"Regular cities would face an economic deficit and would potentially be seen as lost cities because of the perceived notion that only the poor live there,this could lead to the  metropolitan cities turning into slums."

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- MyNews24

Disclaimer: All articles and letters published on MyNews24 have been independently written by members of News24's community. The views of users published on News24 are therefore their own and do not necessarily represent the views of News24. News24 editors also reserve the right to edit or delete any and all comments received.

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