United Asian NetworkRohit Pandit is the Managing Director of SkyHigh Kenya Limited & R1 Corp Limited and currently developing a premium high end residential project called Verona in Westland’s. He is Gold Medalist in Civil Engineering and an MBA from Oxford.
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May 2024 Newsletter Interview Feature
Rohit Pandit-
Managing Director
Sky High Projects
• From India to Kenya:
My fascination with Africa was sparked during my time at Oxford where I delved into “Doing Business in Africa” as a part of my curriculum The stories of entrepreneurship, innovation, and resilience from across the continent captivated me, planting the seeds of curiosity that would eventually lead me to Kenya. My first tryst with Africa started with Ghana when I attended an African Summit for business opportunities in Africa. This summit introduced me to potential partners and stake holders from Ghana proceeding which I relocated to Ghana and developed one of the first affordable housing projects of Ghana consisting of 3000 houses.
Opportunities kept coming and I eventually moved to Uganda and then Kenya. Although Kenya’s allure isn’t new to me. I have always been fascinated by the incredible biodiversity found in both urban and natural environments of Kenya. From the vibrant streets of Nairobi to the serene plains of the Maasai Mara, each moment spent exploring Kenya’s landscapes and meeting its people leaves an indelible mark on my soul both as a businessman and as an individual.
2. Potential in Kenya:
As an admirer of Kenya’s business culture, I recognize the nation’s inherent entrepreneurial spirit and consumer-focused market as valuable assets for corporate growth. Kenyans by nature are business-minded, and I truly admire this. This exceptional quality, combined with Kenya being a consumer country, creates a powerful combination in business. We need to harness this potential, leveraging our entrepreneurial spirit and tapping the consumer-driven market to create lasting impact and prosperity.
Kenya’s strategic location in East Africa positions it as a hub for investment, offering access not only to its own market but also to neighboring regions. In urban centers like Nairobi and Mombasa, there’s a notable surge in demand for retail and residential spaces, driving potential for significant capital appreciation. This makes Kenya an appealing destination for savvy investors looking to make strategic real estate investments with long-term growth potential.
For corporate entities seeking strategic real estate investments with long-term growth prospects, Kenya emerges as an attractive destination. By leveraging our expertise and resources, we can capitalize on the burgeoning opportunities within Kenya’s dynamic real estate market, driving sustainable growth and creating value for stakeholders.
My fascination with Kenya isn’t just personal; it’s also strategic. Per example, my interest in Kenya’s wildlife conservation efforts is driven by a vision to integrate environmental sustainability into our business model. Every decision we make, from selecting eco-friendly materials to implementing rainwater harvesting, is guided by a sense of purpose—a commitment to safeguarding Kenya’s landscapes for future generations. It’s a journey that transcends profit margins, resonating with the vibrant spirit and timeless allure of Africa.
3. Overcoming Investment Barriers:
Like any market, we have encountered several challenges, yet it’s crucial to acknowledge the collaborative efforts between the private sector and the Government in addressing these barriers. The main investment barriers may include lengthy procedures and challenges in land acquisition, which were significant but manageable.
Regulatory complexity has been a notable challenge, impacting the efficiency of investment processes. However, we recognize the government’s commitment to regulatory reform aimed at improving the ease of doing business. Through constructive engagement and dialogue, we’ve seen commendable strides towards simplifying procedures and enhancing transparency, fostering a more conducive environment for investment. Market volatility is another aspect that requires careful consideration. While fluctuations are inherent to emerging markets, the government’s focus on maintaining macroeconomic stability is commendable. Sound fiscal policies and prudent economic management have helped mitigate the impact of volatility, providing a more predictable investment environment.
4. Current Take on Property Market in Kenya/Africa:
As an entrepreneur with interests in the property market in Kenya and Africa, I see a promising landscape with both opportunities and challenges.
a) Rapid Urbanization: Kenya and many African countries are experiencing rapid urbanization, driving the demand for residential, commercial, and industrial properties. This presents significant opportunities for property developers and investors to capitalize on the growing need for housing and infrastructure.
b) Infrastructure Development: The Kenya Government is investing heavily in infrastructure development, including roads, railways, and airports. These infrastructure projects not only improve connectivity but also stimulate property development in surrounding areas, making them attractive investment destinations.
c) Emerging Middle Class: The emergence of a middle class in many African countries is fueling demand for better-quality housing, retail spaces, and office complexes. This demographic shift creates opportunities for developers to cater to the evolving needs and preferences of this growing consumer segment.
d) Foreign Investment: Africa is increasingly attracting foreign investment in its property market, driven by factors such as favorable demographics, improving governance, and economic reforms. Foreign investors bring capital, expertise, and technology, which can help accelerate the development of the property sector.
e) Regulatory Environment: While the property market in Africa offers promising opportunities, navigating the regulatory environment can be complex and challenging. Investors need to carefully assess regulatory risks, including issues related to land ownership, permits, and taxation, to mitigate potential legal and compliance challenges.
f) Sustainable Development: There’s a growing emphasis on sustainable development and green building practices in the property market. Developers who prioritize environmental sustainability and energy efficiency are likely to gain a competitive edge and appeal to environmentally-conscious consumers and investors.
g) Tech Integration: Technology is increasingly shaping the property market in Africa, with innovations such as property technology platforms, digital property listings, and virtual property tours gaining traction. Adopting these technological advancements can enhance efficiency, transparency, and accessibility within the industry.
5. Renting vs. Purchasing Property: Pros of Renting:
When a client approaches us to explore investment opportunities in Kenya, we don’t simply offer them a list of available apartments or properties. Instead, we start by listening to their investment goals and purposes. This approach allows us to tailor their requirement and assist them more effectively. We believe that investment guidance should be accessible to everyone.
Pros of Renting:
• Flexibility to move without the hassle of selling a property.
• No maintenance or renovation costs, which are typically the owner’s responsibility.
Cons of Renting:
• No asset building over time, which means missing out on potential capital appreciation.
• Renting can often be more expensive in the long term in high-demand areas.
Pros of Purchasing:
• Builds equity and can be a valuable asset as property values increase.
• Offers stability and the freedom to modify the property as desired.
Cons of Purchasing:
• Involves significant upfront costs and ongoing maintenance.
• Involves long term financial commitment.
• Less flexibility to move compared to renting.
In fact the off-plan model is a flexible model which allows a purchaser to pay for the house over a period of 24 to 36 months interest free and eventually benefit from strong capital appreciation and rental yields.
6. Dismissing Property Boom Myths:
One common myth is that property values always go up or that there is a housing bubble that is soon to burst! While real estate tends to appreciate over time, various factors like economic downturns, changes in neighborhood dynamics, or oversupply can affect property values.
It’s crucial to understand that while property values do fluctuate, the fundamentals of the Kenyan market present strong indicators for sustained growth. The ongoing urbanization and an expanding middle class are powerful drivers of demand in the real estate sector. As cities expand and incomes rise, more people are seeking quality housing and modern commercial spaces, which naturally drives property values up. This demographic shift towards urban centers is not a short-term trend but a structural change that will continue to stimulate the real estate market for years to come. Investors should see this as a positive signal. The increasing demand ensures that real estate remains a favorable asset class with the potential for both capital appreciation and robust rental yields, securing long-term returns on investment. This ongoing trend offers a compelling reason to maintain confidence in the real estate market’s resilience and growth potential.
Advice to Young Career Individuals: Focus on continuous learning and networking. The real estate industry is dynamic, so staying updated with market trends and building a solid professional network are crucial. Also, embrace technology as it’s transforming the industry, from virtual property tours to real estate fintech.
Biggest Professional Accomplishment: Everyone talks about affordable housing, I am proud to have already build 3000 Affordable Houses in Ghana, 1500 in Niger & another 1500 in Madagascar. I think this has been one of my biggest professional achievements. Apart from that we built and handed over 4 large projects in Nairobi, Kenya in the prime Covid period, without faltering on the timeliness, this also I believe is an achievement. It was immensely fulfilling to see our vision come to life, contributing significantly to the local economy and setting new standards in luxury real estate.
Importance of Community Building and Networking: Networking is vital in business, especially in real estate, where relationships can determine access to opportunities and partnerships. Community building fosters a sense of support and can provide collective bargaining power, enhancing business prospects and contributing to personal and professional growth.
Rohit Pandit is the Managing Director of SkyHigh Kenya Limited & R1 Corp Limited and currently developing a premium high end residential project called Verona in Westland’s. He is Gold Medalist in Civil Engineering and an MBA from Oxford.
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