Jeff Koinange strikes deal with NCBA to stop auction of his two posh Kitisuru homes
A last-minute deal between NCBA Bank and Jeff Koinange stopped the auction of two four-bedroom villas belonging to the broadcast journalist over a Sh130 million mortgage debt.
The auction of the houses in the high-end Kitisuru suburb had been scheduled for Tuesday but the Citizen TV journalist inked a repayment deal with the bank, according to a source at Garam Investments — which had already prepared for the bidding.
Garam said it had already received interest from a number of investors who were expected to place a deposit of at least Sh5 million ahead of bidding for the prime homes, currently valued at Sh200 million.
“NCBA reached a last-minute agreement with him (Mr Koinange) and the auction was stopped,” said the source at the auctioneering firm who requested anonymity. “We got the notice to stop the public auction this morning, but we were already prepared for the sale.”
The bank declined to provide details of the fresh loan agreement, arguing that lenders are barred from discussing borrowers’ contracts in public. NCBA was seeking to recover at least Sh65 million from the sale of each of the two villas over a debt that fell into default last year.
Mr Koinange was living in one of the villas and had rented out the other one — which he had initially used for storing art works. The houses sit on 0.67 acres and both have servants’ quarters.
Mr Koinange, a former CNN journalist, is one of the prominent Kenyans whose properties have been threatened with auction over unpaid bank loans.
The personalities, who include politicians, are fighting to hold onto their prime assets over mounting bank loans as Kenya’s economy slows down and repossessions pick up.
Former Cabinet minister Suleiman Rashid Shakombo lost his house in Kilimani over a debt while assistant minister Stephen Tarus is fighting to stop the auction of his Karen home. Mortgage defaults have jumped in recent months, pointing to widespread distress in the real estate sector.
The mounting defaults in the property market are a reflection of the struggles that mortgage holders are undergoing in an economy that has witnessed a string of job losses in recent months across nearly all sectors as corporates intensify austerity measures to protect their profits. This has seen workers who took mortgages on the strength of their payslips default, with the slowdown in real estate hurting property developers who are finding it difficult to sell units that were built or bought on loan.
Auctioneers say that they held more auctions over the past two years, linked to mortgage defaults. They aver that banks having been moving much faster to seize properties from defaulters. Unpredictable weather over the past two years, a bank lending slowdown and reduced economic activity are creating a growing pool of distressed borrowers.
Auctioneers say there is a glut on the market for repossessed homes as well as office blocks.