Chinese construction firms have introduced a much needed competition in Kenya’s real estate and construction sectors. This has been made possible by Chinese backed investments are which have provided means for technology transfer from the Asia’s largest economy to Kenya, pushing local contractors particularly in the roads sector to the edges of oblivion.
In most cases, it is beyond doubt in Nairobi and other parts of the country that Chinese contractors have been able to deliver quality roads and buildings in less time as compared to what their local construction counterparts would usually take. The result, big time investors are increasingly turning to Chinese contractors.
According to the Wealth Report by Knight Frank released earlier this year, the importation of new forms of building technology into the country by the Chinese has resulted in greater efficiency for building and construction. And with higher efficiency comes a reduction in costs. In effect, local contractors have been forces to play catch-up.
And even though some contractors have had it rough under the new market dynamics, the greater benefit has been for home buyers. With stiff competition, and an oversupply of units especially in the prime property segment, developers have been forced to downgrade house prices to accommodate buyers as well as match competitors.
China’s primary participation has been in undertaking the construction of major government infrastructure. Their venture into other construction segments was a spin-off, however many experts agree that the introduction of Chinese building technology was and will go a long way in improving the real estate market.
Indeed, the phenomenal establishment of Chinese construction companies in Kenya is not an isolated case. Other African countries including Nigeria, South Africa, Zambia and Angola have all benefited their infrastructure and real estate from the technological ingenuity and financial capacity of the Asian Tigers, without mentioning the downside.
Starting with roads, railways and other massive government projects, Chinese companies have advanced rapidly to gain foothold in the private sector, overseeing the construction of major residential, commercial and mixed use developments.
In recent times, construction companies from other countries have taken note of the massive opportunities the Chinese have been enjoying, and have launched their own initiatives to claim a piece of the cake. For instance, the US construction company Bechtel’s multi-million dollar deal with the Kenyan government to construct a toll road from Nairobi to Mombasa. Opportunities abound.
With technology getting better and competition getting stiffer, buyers may continue to be more optimistic about the prospects of reaching certain personal goals, like home ownership for instance.