Michael Maina is the General Manager of Norwich Union Properties Limited, a real estate company that owns several properties in Nairobi. These include Norwich Union, Southern House, and Lyric House within the Central Business District and Libra House, located along Mombasa Road.
Norwich Union Properties Limited comprises a group of 150 members who started out as a small ‘chama’ back in the 90s. They started out small and used to meet regularly and contribute money like any other chama. They later took in new members, and as they grew in numbers, so did their contributions.
Maina and his then 30, fellow members formalised their chama in 1996 under the name Critical Mass Group Limited (CMG) which later changed to Norwich Union Property Limited.
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The company’s fortunes changed for the better in 1999 when they acquired the 8-storey Norwich Union building opposite Hilton Hotel.
“We got into real estate when it wasn’t as popular as it is right now. Back then, we focused on buying existing property, renovating it and then rent it out,” Maina told KCB Venture Magazine.
Since then, they have diversified their portfolio and began developing their own properties.
“Our focus was mainly in creating cash flow. But after witnessing the growth of the property sector, we progressed into development,” he added.
The company which now boasts 150 members has several properties in Nairobi; Southern House, Lyric House in the CBD, Libra House along Mombasa Road and Ratna apartments in Lavington.
Maina revealed that they are also developing houses in Athi River.
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“Before investing, we go through a thorough investment analysis. Every investment needs to make sense for our investors and show potential for returns and growth,” he said.
“The growth is supported by a real demand which is why talk of there being a bubble in the market is untrue.”
Just like most companies around the world, Nowrwich too has had its fair share of challenges. They endured their roughesrt patch in 2010 when they were trying to expand.
“KCB Bank came through for us. Throughout the years they are always ready to support us because they understand our business and our needs.”
Norwich Union has weathered multiple challenges to hack it in the construction industry. Some of the challenges include the US housing-market crash which triggered a financial crisis globally.
“I remember everyone started running away from the real estate industry, especially the banks. None of them wanted to finance real estate projects,” Maina recounted.
“We had sold some property but we were still short of Ksh500 million. This was a large amount that we needed to increase our asset portfolio,” he recalled.
“Fortunately, KCB Bank came through for us. And throughout the years, they have been ready to support us because they understand our business and our needs. Because of this great partnership, seven years later, our company value stands at Ksh2.5 billion,” he added.
Like any other company, Norwich has faced severe competition from other players in the industry.
“Everyone now knows there’s a good thing in real estate and wants to get into the market. This has resulted in overcrowding. We started with a return of 12 per cent but this has slowly been going down.”
According to Maina, the biggest challenges in the construction and property development industry is timing, planning and the availability of funds. However, he notes that an investor in this sector needs patience to thrive.
“It pays off.”
“Liquidity is also a great advantage. Because if you have the money you are able to demand a lot of things and KCB Bank affords us that liquidity.”