Wednesday, March 2, 2016

Land and Chinese Private Investment in Kenya: From Real Estate to Agriculture

By Hongxiang Huang, Yin Qiu, Mingxuan Huang
[Editors Note: China House is a client of Cowries and Rice]

Between 2013 and 2014, 35 km from downtown Nairobi, a group of ambitious Chinese investors planned a 300-acre real estate mega investment – City of Harmony. It was going to be the China city of Kenya: stores; factories; residential homes; and offices. Hundreds of Chinese businessmen were the shareholders of this project and investment flooded in from many parts of China. Kenya’s role in China’s One Belt One Road meant that a there were potentially huge profits to be made by early speculators.However, in 2015 this project ended with a lawsuit, and the City of Harmony was gone.

"Li Wenjie, one of the major shareholders and a businessman in Kenya, colluded with locals and committed land fraud of over 20 million rmb [$3.8 million], and he blamed me for cheating the system," said Guo Dong, another major player of this mega project. In his eyes, a Chinese con man is almost worse than a Kenyan one, as many Chinese businessmen trust their countrymen, making them easy to exploit.

To date, Guo Dong and Li Wenjie have not resolved their case in Kenya.

Land deals have translated into overnight fortunes in China. When it comes to Chinese private investment in Africa, real estate follows a similar pattern as it is seen as one of the most profitable investment options. In Kenya, there is a famous story about four elderly Sichuanese Chinese businessmen who, around 2007, came to Kenya to work on a state engineering project. Having realized there was great opportunity for profit, these four businessmen quit their job and each put up 2.5 million rmb [$385,000] to buy a piece of land and develop it into residential housing. They each ended up making 10 million rmb [$1.5 million] from their investment.

This story, dubbed the "Four Chinese Elders Dug Gold in Africa", inspired many other Chinese entrepreneurs to come to Kenya for real estate, which was hugely profitable as land price rose 535% from 2007 through today. Currently, real estate is still one of the hottest destinations of Chinese private investment in Kenya. However, without enough local knowledge and experience, a lot of money is lost as well.

"When we started building the house, some people came to us and said this land belonged to them. More importantly, they presented their deeds, which were as authentic as ours," recalls a Chinese businessman in Kenya who does not want to reveal his name. According to our research, this kind of situation is very common in Kenya.

"Because of a multitude of reasons, problematic land deeds are common in Kenya, and good land titling is crucial," explained Faith Kanaga, a Kenyan lawyer who specializes in land transactions. According to Kanaga and other lawyers, when foreign investors do not understand the local context, it is easy to be cheated by many so-called "brokers", Kenyan and foreigner alike.

"Chinese investors do not have good service channel when they come to Africa, and therefore a lot of times they run into problems. And because there is no good platform to share knowledge, many Chinese investors can run into fraud since they never share lessons learned regarding problematic land titling," said Sherry, a Chinese entrepreneur who has lived in Kenya for over 20 years.

However, despite these risks, Kenyan land keeps attracting Chinese investors.

Mike, a real estate broker in Nairobi, told us that "the Chinese want land plots in Nairobi, and only in prime areas."

As developable land in Nairobi becomes more and more scarce, a handful of Chinese businesspeople have started to look into rural lands as well, but not solely as a real estate investment. According to data from the Food and Agriculture Organization, in 2009, Kenya was the world’s largest grower of pyrethrum, a flower used to make insecticide. However, due to management issues, this industry declined in Kenya in recent years.

"We partnered with Kenya’s Ministry of Agriculture and are aiming to revive this industry," said a Chinese entrepreneur in Kenya who does not want his name or his company to be identified. Today, they are acquiring rural land through partnership with locals, and the lands are producing large quantities of pyrethrum, which will be processed and then shipped to China for further refining.

Beyond pyrethrum, Chinese businesspeople are looking at other opportunities in rural Kenya. For example, Zheng has been cultivating his farm, a one-hour drive north of downtown Nairobi. Unlike many Chinese entrepreneurs who focuses on the city, he believes rural areas host the most profitable new opportunities. Two years ago, he began renting four acres of land and planted Chinese vegetables on them, to test whether they could grow in this foreign soil. Today, his farm has almost dominated the Chinese vegetable supply chain to estimated 40,000 – 60,000 Chinese who are living in Kenya.

"I partner with local farmers, teach them how to grow Chinese vegetables, supply them with seeds, and buy from them when their crops are ready," said Zheng, mentoring his local farmers to harvest vegetables for his customers.

Foreigners are not allowed to purchase land in Kenya, so Zheng partners with locals to make his investment effectively invisible. In his eyes, this saves him a lot of trouble.

“The Chinese have a saying: be quiet and make your money, that is the wisdom” explained Zheng.


  1. Hello Mrs. Mr.

    I am the representative of a GROUP composed of operators
    economic. This group is involved in various activities
      Provide loans to all people in financial difficulties
    invest in well consistent and profitable projects

    For safety, trust and transparency, is the
    process to follow
    you have to travel to our base for:
    Making contact with one of our representatives and our consultant
    Financial (a meeting and -study of your project)
    Determine the existence of funds that will be available to you
    Drafting and signing the contract at the notary
    Finally, the banking formalities for the transfer of funds

    This process takes more than 72 hours to get everything done
    If you have questions, we're here to answer
    Thank you for understanding and we respond quickly


  2. Keep writing the same articles. We are glad to be associated with this,thanks for sharing.

  3. This article was amazing.. thanks for writing

    MCX Call in Gold

  4. the massage house a bit, however other than that this is magnificent blog. An excellent read. I will certainly be back. best real estate management

  5. Hey, that’s really a good post on pets for sale in Delhi, i really like your blog as the information is very useful if you are a pet lover. Well, there is one more site for the same service you should check it for more detail.

  6. Thanks for giving the information it is useful for me.Chinese Business Lawyer

  7., offer high quality business legal services to serve you best with full satisfaction Chinese Business Lawyer

  8. You may also find best Chinese Business Lawyer for more info : Chinese Business Lawyer

  9. Find the best chinese business lawyer in china from leading & trusted legal advisor firm, offer high quality business legal services with full satisfaction. Chinese Business Lawyer

  10. best chinese business lawyer in china from leading & trusted legal advisor firm, offer high quality business legal services.Chinese Business Lawyer

    Contact Us
    Three contact channels to consult your legal affairs are very accessible to our legal expertises under the following:
    1, instant messages on line

    2, email to

    3, emergency call (+86)18874903896

    You are also very welcomed to visit our Changsha office for face to face discussing your specific issues .Our address is 28th Floor,DaHua Hotel,NO.528 Laodong West Road, Changsha City, Hunan Province


    Our Guangzhou Office :
    17th Floor,Tower B ,South Media Center No. 289 Guangzhou Middle Avenue

  11. My programmer is trying to convince me to move to .net from PHP. I have always disliked the idea because of the expenses. But he's tryiong none the less. I've been using Movable-type on a number of websites for about a year and am worried about switching to another platform. I have heard good things about Is there a way I can transfer all my wordpress content into it? Any kind of help would be greatly appreciated! Chinese Real Estate Investors

  12. Please let me know if you're looking for a article author for your weblog. You have some really good posts and I think I would be a good asset. If you ever want to take some of the load off, I'd absolutely love to write some articles for your blog in exchange for a link back to mine. Please blast me an email if interested. Thanks!Foreigners Buying Real Estate In Us

  13. There are a lot of reasons why Andy Brown is the Best Real Estate instructor in central Florida.

  14. This comment has been removed by the author.

  15. It is good news that China is investing in land and agriculture in Kenya. It increase the living of the Kenya people. Dr Andrew Unterweger have deep knowledge on China investment.

  16. SpainForSale.Properties isan Exclusive Real Estate Agency offeringLuxurious Properties For Sale and Rentonthe Costa del Sol, such as: Luxury VILLAS FOR SALE GUADALMINA BAJA

  17. Tallahassee could be the best way to begin your search for a starter home. With houses being more affordable then ever before you can miss out on a great deal now but next week there will probably be another one.