Billionaire Shahbal Admits Sh450 Million Loss on Mombasa Buxton Housing Project

A well-known Mombasa businessman has spoken publicly about a major financial hit during the rollout of one of the county’s prominent residential schemes. Suleiman Shahbal revealed in a recent podcast appearance that his company absorbed a Sh450 million loss over just nine months while working on the initial stage of Buxton Point.

Shahbal made the comments during an interview on the Tubonge With Chris the Bass programme. He described how the project ran into immediate difficulties after breaking ground in Buxton, a densely populated neighbourhood close to the city centre. The ground turned out to be softer than anticipated, requiring extensive additional foundation work that pushed costs far beyond original estimates.

Another serious expense came from the lack of a functioning sewerage network in the area. The developer ended up having to build an entire sewer line at a cost of Sh120 million. Shahbal referred to that expenditure as effectively lost, with no direct return on the investment at that stage. He explained that these unforeseen requirements caught the team off guard and quickly eroded the financial buffer they had planned.

As the founder of GulfCap Real Estate, the firm developing Buxton Point, Shahbal said the experience taught hard lessons about site assessment and contingency planning in coastal construction. He admitted the original plan underestimated the level of preparatory civil works needed before vertical construction could begin in earnest. “We went in thinking houses were the main challenge,” he remarked, but the ground conditions and utility gaps proved far more demanding.

Buxton Point targets middle-income buyers with a mix of one-, two- and three-bedroom apartments. The scheme forms part of wider private-sector attempts to help close Kenya’s persistent housing gap. Official estimates put the national deficit at roughly two million units, with new supply struggling to keep pace. In urban centres such as Mombasa, where population growth continues to outstrip infrastructure upgrades, such developments carry added importance.

Despite the early setback, Shahbal highlighted some measurable benefits already visible on the ground. The project has created employment for several thousand workers, ranging from skilled masons and electricians to labourers and suppliers of sand, ballast, cement and steel. Local hardware shops, transport operators and food vendors in the vicinity have also seen increased business during the construction period.

Handover of completed units is expected to gather pace before the end of this year. Later phases should benefit from the groundwork already completed and from adjustments made after the first-round challenges. Shahbal stressed that the company has since strengthened its project management approach to avoid repeating the same cost overruns.

Construction in Mombasa frequently encounters site-specific obstacles. Soft marine soils, high groundwater levels during rainy seasons, and incomplete municipal services are recurring issues for developers across the coast. Material prices, which spiked sharply after global supply shocks in recent years, have only added pressure. Even with some stabilisation in cement and steel costs, budgets remain tight for projects aiming to stay within affordable price bands.

Shahbal, who has contested the Mombasa gubernatorial seat in past elections and maintains deep roots in the region’s business community, framed the loss as part of the broader reality of large-scale real estate delivery in Kenya. He argued that private developers need clearer support mechanisms—whether faster approvals, better utility planning by county governments, or more predictable incentive structures—if ambitious housing targets are to be met without repeated financial strain.

The Buxton experience also illustrates wider sector dynamics. Kenya’s affordable housing programme relies heavily on partnerships between government and private capital. While public land and tax relief can lower some barriers, developers still bear most of the risk when ground conditions or infrastructure shortfalls emerge. Shahbal’s account serves as a practical example of those risks playing out in real time.

Moving forward, GulfCap Real Estate continues to market Buxton Point as a modern community with shared facilities including parking, security and landscaped areas. Interest from potential buyers persists, particularly among salaried workers seeking ownership rather than long-term renting in a city where rental yields remain high.

The episode underscores a simple but often overlooked point for anyone entering Kenya’s property development space: thorough geotechnical surveys and early engagement with utility providers can prevent multi-million-shilling surprises. For all the ambition behind projects like Buxton Point, execution details determine whether they deliver homes on time and within reasonable financial limits.

Shahbal closed his reflections by emphasising persistence. The Sh450 million figure, though substantial, has not halted progress. With foundations laid and lessons absorbed, the development is advancing toward delivery of completed apartments that should help ease some of the pressure on Mombasa’s housing market.