After the hulabaloo by Nairobi traders last week I remembered how I finally got to wear a hard hat a few weeks ago. A hard hat is that one you see people wearing as a safety precaution whenever they visit a construction site. I have been to many construction sites but I don't seem to recall ever wearing one of those things that sits squats on your head as if not sure what to do next!!
This was at an apartment complex under construction somewhere in the vicinity of Lavington. Nothing special about this you may say given that there are tens of other projects under construction of a similar nature, but what if I was to spill the beans on who was behind this project one of many squeezed along a narrow road well worn and now potholed by the passage of countless trucks and other heavy construction equipment ferrying building materials to the numerous construction sites located along this area which not so long ago was zoned as a low density residential area.
While on the outside this looked liked any other construction project with the accompanying din, bedlam and noise this was a project that was for 108 apartment units on a 1.1 acre piece of land. OK, you are probably saying, where are we going with this? All is about to be revealed so have some patience.
The project as I was saying, before your thoughts rudely interrupted me, is for 108 apartments in 9 blocks of 12 apartments each with each apartment having direct access to a lift that serves each floor. In addition, all 1st floor apartments will have an unrestricted view to a raised platform that will include a children's play area-cum-sky garden so that you are able to monitor your young ones as they play and cavort amid the plants, flowers, trees and swings and other children's favorite playthings. Underneath this sky garden is where the vehicle car park will be located to ensure maximum use of the available space with each apartment allocated two parkings.
Are we together so far though I can see you shrugging your shoulders in exasperation and wondering when I will get on with it ?? Good....now where was I!! Oh yes, I was at the point where I was about to tell you who is behind this project but first, back to those traders in Nairobi last week who were protesting about the invasion of their rights to hawk all things made in China by the same manufacturers of the Chinese products the Chinese themselves!!
But what if the Chinese are mad with the inability of our business people to sell their products quickly enough since all they do is sit in their stalls, decide on a mark up of 100% and let the buyers come to them yet this means that the products get no buyers since they are now as expensive as their European counterparts!! The Chinese on the other hand have known for hundreds of years that a successful business is the one which relies on low margins but high volumes meaning you go out there looking for business by enticing customers to buy based on price alone and at the end of the day the many sales that you make translates into a healthy profit........................which works wonderfully in a country teaming with a billion people!
Now back to my story!! While the traders of Eastleigh and River Rori were noisily protesting about the Chinese hawking products and butting into their business, the apartments that I have mentioned are also being built by a Chinese company, whose contractor is a sister company also Chinese. Presumably the supply chain of consultants also are of Chinese origin for this project, that broke ground in November 2011 and whose first Phase is due for completion on time and on budget in December 2012. 40% have already been sold off plan.
Now I ask you. Who wants their hard earned 20% deposit locked up in a project whose original completion time was 12 months but has now stretched to 24 months with no end in sight when there is a Chinese developer who will deliver on time and on budget within the agreed period therefore assuring you of value for money? Who cares who the developer is so long as he is delivering a product that you have paid for in advance (20%) with the balance on completion and without fear of losing your money?
That is what the Chinese, love them or hate them do. They identify a niche that has led to a dissatisfied and dissapointed clientele and fill it faster then our local developers take to break ground then they move on to something else. Their business acumen long honed on a whetstone of opportunities that come from servicing a huge population, where margins are squeezed almost to the point of being non-existant but where volumes rule the day and you will see why those protesting traders were showing their total lack of understanding in the trading business.
At the end of the day, apartments or petticoats are just commodities that need to be traded at the best possible price, in the shortest possible time and with the quickest turnaround time so that capital is not locked up for long periods of time and the quicker the Eastleigh and River Rori traders realise this the sooner they will change tact and adopt a low margin high volume business model for their own good!!
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