Debt collectors have listed a landlord's Ksh 1 billion property and a parcel of land for auction, asking potential buyers to part with Ksh100 million (equivalent to 10 percent) as a deposit.
Garam Auctioneers based in Westlands, Nairobi indicated that they were ordered to recover the assets by their client. The property located along Kisumu Road in Kisii County will be auctioned on Tuesday, April 20.
"Under instructions received from the chargee’s advocates, we shall sell by public auction the under mentioned property together with buildings and improvements therein," Garam said in a notice.
The piece of land measures approximately 0.3354 hectares (0.8288 acres) and is developed with a multi-storeyed commercial block comprising of shops, offices and a hotel.
Its basement hosts a parking lot, storage and carpentry area. The second basement hosts a lavish and popular club in the town, while the other floors have banks, restaurants, insurance and credit firms and a Kenya Police Sacco.
The auctioneers added that the building also contains junior suites, an executive lounge, a mini Presidential suite and a fully furnished presidential suite.
"The title deed is a leasehold interest for a term of 99 years at an annual ground rent of Ksh 2,800. The unexpired lease term is approximately 89 years. Main services water and electricity are connected to the property while drainage is to the trunk sewer line. The hotel and gym have a good reputation and have been operational for 6 years.
"The prime property generates an estimated monthly income of Ksh 8 million. Failure to pay the balance after providing a deposit will result in forfeiture of all the money paid in advance," Garam Auctioneers announced.
In December 2020, the Central Bank of Kenya (CBK) allowed banks and auctioneers to recover loans after the default rates rose. CBK noted that individuals who were affected by the Covid-19 pandemic failed to service their loans despite being offered reliefs and tax waivers.
On Monday, March 29, auctioneers warned property owners and loan defaulters to brace for tougher times and be ready to lose their assets in the coming months. Notices were posted online and on local dailies targetting multi-million mansions, high-rise apartments, motor vehicles and household items countrywide.
"The auction notices cast a lot of doubt on our financial markets. The demand and supply for money is always dictated by the value of the interest rates. We have other external factors like government policies.
"The worst is yet to come. Last year, the government assumed that the tax reprieve would work, but businesses are still suffering. Right now, restrictions have come back without the tax reprieves. What do you expect this year? It means it will be worse," economist Sam Okumu lamented.
