Suraya Property Group has secured Sh1.6 billion financing from four banks to complete mega housing projects, whose construction had fallen behind schedule due to the biting liquidity crisis that has hit the property sector as a result of interest rate capping.
The cash injection hands the company the much-needed lifeline to complete the projects.
DTB, Coop Bank, NBK and Equity Bank have refinanced the housing developer that targets middle and high-end buyers to enable it complete the projects the lenders had earlier financed.
The property developer said it is banking on the fresh capital boost to avert further delays of its remaining projects.
Suraya Property Group chief executive Peter Muraya said the funding negotiated separately with various lenders and at different times over the last nine months has seen the banks agree to the additional finance, creating a defined exit for buyers who can now take possession of their units.
“Each bank has undertaken to ensure that each of the projects they had financed is completed without further delays,” said Mr Muraya in a statement.
“We are now fully back on track to finish five out of the nine pending developments with the new funds,” added Mr Muraya. He said the firm was still keen to raise addition capital.
The announcement by the developer comes as a dip in prices and the slow uptake of newly-built units has raised fears of renewed pressure on developers, who borrowed to fund for-sale projects as obligations mature.
A slow down on growth of private sector credit is also hurting real estate, which heavily relies on bank loans for unit purchases.
This article first appeared on Business Daily