Troubled real estate developer Suraya properties has secured KSh. 1.6 billion financing from five local banks in a bid to make good its promise to property buyers.
The financing which has been the result of over nine months of negotiation according to the group’s CEO Peter Muraya, will be achieved from five lenders including Cooperative Bank, Equity Bank, Diamond Trust Bank (DTB), and National Bank of Kenya (NBK).
The cash injection is a shot in the arm for the developer who has featured in the media in recent weeks for foul play in meeting its obligations to buyers. Hopefully the developer will now make customers whole.
Recent reports have cast real estate developers on the unfavourable cross hairs of poor financial management following a report by the Central Bank of Kenya which showed that apart from buildings, real estate companies have developed a tendency to default on loans for which their lifeline occasionally depends.
Bankers have taken note, even as many believe the rate cap and the slow-moving property market are chiefly to blame since demand for expensive properties has been stifled more or less in equal measure with financing.