Pan- African housing lender Shelter Afrique froze a loan that was extended to a Nairobi-based property development company in Ruaka, Kiambu county.
This move left property investors that were banking on the 240 modern residential apartments scheme in confusion over the future of the project.
Shelter Afrique said this week, the property developer, Kings Pride Properties, did not follow due diligence with the lenders financing standards.
“Shelter-Afrique as a responsible lender only grants loans under very stringent terms and conditions and if any of such conditions are not satisfactorily addressed or met, loans are denied,” said Shelter Afrique in response to Business Daily queries.
“This is in line with the international lending standards that we follow strictly as an institution” Shelter Afrique added.
The home buyers who had remitted a deposit to the property developer in an off-plan purchase agreement are staring at huge losses.
The planned development is dubbed Glenwood Gardens. It features a mix of two and three-bedroom units starting at a cost of Ksh5.5 Million. The project was due to be completed in July 2017, having been initialized in early 2016.
Kings Pride properties attributed the delay to the cancelation of the debt financing deal by Shelter Afrique.
“We got a challenge with Shelter Afrique, but we have identified and agreed with another financier and are in the process of formalizing the same,” Kings Pride Properties CEO said in a statement to a local daily.
In the past, Shelter Afrique has supported the development of 3821 housing units in Kenya and impacted 19,015 beneficiaries.
The project would have supported a Ksh2.6 Billion plan for affordable housing including the 240 units in Ruaka and 440 more units in Kiambu.
The property market has increasingly faced difficulties due to developers' hardships in disposing of new housing units amid an oversupply of both commercial and residential spaces. The situation has been worsened economically by the pandemic because of the economic factors posed.
