Real estate spawns growth of private security business

Security Guard [Courtesy]

While increased incidents of terrorism have in the last 10 years fueled the growth of private security business in the country, the fast-growing real estate sector has also played a major role.

According to industry players, the government’s huge infrastructure projects, paired with affordable housing programmes have provided a good environment to realise growth in this sector.

The affordable housing project is one of President Uhuru Kenyatta’s Big Four Agenda that seeks to add over 500,000 housing units to the market.

And as the government provided a conducive environment for developers to contribute to this agenda, so did the market open up for the private security companies.

“I have seen a lot of construction during this (President Uhuru Kenyatta’s) regime which is obvious that demand for private security has gone up,” said Kenya National Private Security Workers Union General Secretary Isaac Andabwa.

Andabwa said the surge has increased the demand for cadets and guards who man strategic buildings, malls and government institutions. “When there is an increase in construction and real estate, obviously the demand for security also goes up,” he said.

Kenya’s plan is to provide at least 200,000 units annually to fill a shortage of two million units and achieve the 500,000 units by the end of President Uhuru Kenyatta’s regime next year.

Developers of these houses usually contract security companies to provide guards and other solutions so as to attract more tenants and buyers. This adds value to the property.

Erick Owaga, Security Manager Security 24, while acknowledging that the growth in real estate has impacted positively on the private security business, said the business environment has also been saturated.

“There are so many security companies, so the factor of cost still comes in,” said Owaga. His company was one of those who exhibited during the recent Kenya Homes Expo held in Nairobi.

He said the business is no longer as profitable as it was before due to the mushrooming of security companies. “That means you have to offer your services at a reasonable cost, especially today. You may be forced to go below reasonable cost to remain in business because of what others are offering,” he said.

He says bidding prices for security services between new entrants in the market and those who have been in the scene for a while have disparities as the new ones tend to offer at a lower cost.

“This now makes the industry very competitive especially in terms of cost. It has to be very moderate and accommodative to the customer,” said Owaga.

“You may fail to get much but you do it because you want to remain in the market. The more guards you sell, the more profit you will realise but it may fail to be that because the more you have the more incidents you register.”

This means premiums on the insurance cover on contractual agreements with developers and the employees (guards) will go up amidst squeezed profits.

“At the end of the day, the industry currently is not doing so well,” he said.

Owaga noted that developers are their major clientele as individuals who put up their own homes tend to assess their own security and devise their own ways of combating threats.

“Individuals may analyse their own security situations and you may know what to avoid and a few things to involve yourself in, but for property developers, you need to have one because you will have clients as tenants or buyers so you have to incorporate security,” he said.

Mr Owaga observed that most clients prefer guards compared to other tech-related security aides and gadgets such as electric fences and CCTV cameras.

“But you must integrate with cameras so that other people can detect on your behalf and act,” he said.

He said insecurity, the aim is to deter, detect and prevent which needs the physical presence of a guard even when other tech gadgets can be used to supplement.