In July 2015, Kenya’s real estate industry witnessed the entrance of a multinational player with brand new franchising model.
Coldwell Banker, one of America’s leading real estate brokers that boasts of a global sales force of 86,375 agents in 3,047offices in 43 countries, opened its first ever African office in Nairobi.
The Madison-headquartered property franchiser is Realogy Holdings Corporation’s biggest brand with total US sales volume of about Sh21.2 trillion ($212.2 billion) .
“Our goal is to establish a presence in Africa, starting with Kenya,” said Danielle Callaway, managing director of the Kenyan branch, during an interview in her office on the 2nd floor of The Oval edifice in Nairobi’s Westlands.
Callaway has close to a decade of experience in the East African property market and therefore deeply understands the region’s real estate business.
“I did housing and hotel development in Tanzania and residential and commercial projects in Kenya for about 10 years,” she says.
And she has an explanation for why Kenya comes first in Coldwell Banker’s development blueprint for Africa.
“Looking at the growth opportunities sprouting in the Kenyan market, we think now is the time,” she says.
Her assessment is that a lot of multinationals and people in the Diaspora are coming back home and they are looking for places to live.
Additionally, there is increasing demand for quality housing and servicing from the general Kenyan population.
“We want to take advantage of the many opportunities in Kenya and also bring about new experiences in African markets,” says Callaway.
The arrival of the 109-year-old conglomerate has been welcomed with a mixture of panic, hope and huge expectations.
Whereas local brokers see a potential threat, landlords have found fresh hope for a more transparent future in the real estate business, and the end-consumer expects improved service delivery. That, however, is as far as everyone else is concerned.
“We are not here to compete with anyone,” says Callaway. “If anything, we are looking forward to partner with local agencies.”
The company brings with it a technology platform and unique franchising model that will significantly change the way real estate business is conducted in the region.
“We are in the process of introducing a tech system and new model that will increase transparency and professionalism in an industry that is traditionally unstructured and permeated by unscrupulous agents,” says Callaway.
It is a matter of fact that when looking for a property in Kenya, you call an agent who calls an agent who calls another agent who knows where to find a property on sale. You know the drill?
Everyone wants to be a real estate agent, especially in Nairobi where billion-dollar property deals are brokered on an almost daily basis.
“The industry is unstructured, cumbersome and with little or no transparency. We need some order in the house,” says Callaway.
The real deal
Coldwell Banker’s franchising model is benchmarked against best practices in the world and it all boils down to transparency and professionalism.
Property brokerage in the local industry, Callaway says, is yet to fit in properly as a profession that is acquired through standard training and qualification.
“There are very few professionals in the industry, and several thousands of untrustworthy real estate advisors,” she says, adding that is about to change.
Coldwell Banker provides education and training services for real estate agents, agencies and practitioners.
“First and foremost, we must train the agents so that they are better equipped to be experts in the market. That is pivotal,” says Callaway.
Then there is this technology that everyone in the market is waiting for.
Coldwell Banker is set to introduce a technology platform that will allow estate agencies and landlords to better monitor their agents.
“It is an extensive Content Management System (CMS) that allows for accountability and also promotes international marketing of local properties,” says Callaway.
The tech platform will make it easy to access agents, agencies and properties through devices such as mobile phones and computers. Home owners and buyers will be able to connect with their agents with just a click of a button.
“If you are a large scale developer, estate agency, or a multi-unit landlord, our technology platform will help you manage your properties and agents and monitor all transactions and activities,” says Callaway.
Making side deals is a common practice in Kenya. For instance, you may want to sell a property and need an agent to do the job. The problem is that some agents peg the commission way above the normal rate, reducing revenue for the property owner.
“With the CMS software, property owners will be able to track all processes and transactions involving buying and selling of properties,” says Callaway.
Coldwell Banker is seeking to partner with various real estate agencies across the region to help it implement and promote the system in Kenya even as it plans to introduce the same in countries like Ghana and Nigeria.
“The idea is to build a network of local companies that will provide a tech platform, education and training for agents and a unique marketing and branding structure,” says Callaway.
The tech is targeted at middle to luxury markets that include locals, those living in the diaspora and internationals.