The Uncertain Future of Real Estate in Nairobi

It is likely to assume that during an election period, investors delay investing in new properties and the spending rate decreases.We see a lot of property with the ‘for sale/rent’ signs. Apartments, houses, villas and bare land around Nairobi. Nairobi, has some of the most expensive property, land and housing. On Mombasa Road, an acre goes for about 480 million, and for the same amount, you can get a quarter in Upper Hill. In Muthaiga where ambassadors, top politicians and CEO’s reside, an acre goes up to 300 million shillings. Going by the house pricing index released by the Kenya Bankers Association in 2016, there is a reason to turn a blind eye, not really by being ignorant, and have a bit of doubt. In the past three years or so, there has been an increased supply, surpassing demand, and is now working against the developers, since it’s an inflated supply, which leads to losses. Price drop and stagnation are being witnessed in some parts of Nairobi and the market is being termed as not lucrative, at least at the moment. Two things involved : People are not spending but they are preparing to spend after the elections Prices will…

Investment Guide In Kenya

Kenya has been in the Global limelight as a favourable investment destination. It has experienced its share of good performance over time, contributing to 7.85% and 8.12 % of the GDP for the last three years according to the Central Bank of Kenya economic review (2015) The Nairobi traffic jam! Don’t we all hate it? Developers are avoiding areas with  a lot of traffic for other parts of the city. Kenneth Kaniu, Britam CEO spoke during the launch of the firm’s Nairobi Office Market report “The traffic continues to be very challenging where getting in and out is not easy so as a result, many new tenants who are coming on board including multinational companies are opting for other areas.” Land prices in Kenya as a whole have in the past few years been going through the roof. We do not have control over this. It is unfortunate that this fast growing economy has some of the most expensive lands with not enough natural resources we can rely on. Places not too far from the city where most people report to bake bread every day, continue to develop at a fast rate and are the best to invest in. Ngong,…

Buying Your First Home? Here is A Guide

Buying your first home is not like buying a shoe or any accessory. It’s not a walk-in walk-out, over the counter style purchase without the pomp and ceremonious procedure it deserves. If anything, it is a huge step! While the aim is to own property, you have to pump in a lot of research to understand the pros and cons of buying versus renting. The interest rates, housing market, mobility and your future plans are some of the things that need to be considered. Before reaching a conclusion, you have to put all factors on a weighing scale, push the numbers on an abacus and make a sound decision with all the metrics right. While the suspicion that real estate agents are making a living out of a gleamy con-man lifestyle in the field, potential buyers are always on the look out trying to find someone who knows enough. Using a savvy and trusted realtor can help protect your interests and also get you the right information with regard to buying a home. Ngumi Gituro, 1st Level Product Support at Jumia Classifieds Africa and a home buyer, expresses that, “It is important to account for every expense that you make…

Possible Ways To Put Idle Land Into Use & Make Money

The number of people who’ve bought land as an investment and don’t know what to do with it is baffling other than wait for it appreciate in value. So what can you do to make some money with that vacant land instead of waiting to it’s value changes. We’ve come across several proven ideas that we believe will help you make some good money off your dirt. Storage Yeah, we know it’s hard to believe this but there is a lot of money in storage. For many who have invested in land with close proximity to airports or port harbors will benefit more with this kind of business. Kenya’s current importation level exceeds the the amount the airports and harbors storage facilities increasing the demand for storage facilities outside this areas.Developing mini ­type facilities doesn’t require much capital, marketing or staffing. The opportunities are endless depending on what you’re willing to store. Parking space Parking is a billion shilling industry in Nairobi alone. With over 30,000 units of vehicles being bought in Kenya, 60 percent of those vehicles are in Nairobi increasing the demand of parking inevitably. Wherever it is you’ve bought land within the city, you won’t go wrong…

Government Scraps Construction Levies for Developers

The government has moved scrap all duties and levies charged by state agencies and county governments on construction projects in a bid to spur development. The move is expected to eradicate the multiple charges paid by developers seeking to put up either residential or commercial property. A brief from a Cabinet meeting chaired by President Uhuru Kenyatta indicates that the multiple charges levied by various ministries, departments, agencies and county governments for the construction industry had contributed to the increase of costs in the sector. This also led to the unwarranted delays in obtaining requisite approvals. “Cabinet has eliminated duplication of roles with a view to ensuring that government ministries and departments perform their core mandate. Overlapping services will now be performed by the ministry, department or agency best suited to offer the requisite service,” a brief from cabinet reads In June during the presentation of the 2016/2017 budget, Treasury Cabinet Secretary Henry Rotich scrapped charges levied by the National Construction Authority and the National Environment Management Authority. However months after the budget was approved, the scrapping of the levies is yet to be gazetted. Developers paid 0.5 percent of the value of a building above Sh5 million to the…

Fusion Capital to Seek Alternative Funding After Failed Offer

Fusion Capital plans to seek alternative funding for the development of the planned Greenwood City in Meru after its Real Estate Investment Trust offer failed to raise the projected Sh2.3 billion. The company achieved a 38 per cent subscription which is below the 50 per cent threshold managing to collect Sh873 million with only four investors against the requirement of seven. “Despite the fact that the offer was not successful, the promoter will continue to engage the Greenwood project and will seek alternative sources of funding,” the firm said in a statement. “The promoter will engage the Capital Markets Authority and the Nairobi Securities Exchange with a view to reopening the offer a future date.” Source; Business daily

Developers Spruce Up Malls, Scrap Goodwill Charges to Woo Tenants

Floor space is not selling as fast as anticipated, forcing Realtors to slash goodwill that previously ran into millions of shillings, hire interior designers to spruce up the buildings, set up indoor entertainment spots and offer freebies. The glut in mall space has changed the way developers and operators treat tenants as they seek to edge each other out for some scraps of profitability in the abundance of empty mall space and falling tenancy. Some owners are even opting to occupy huge spaces with their own businesses. “Landlords should be ready to go business unusual. Failure to consider the target population which has a direct bearing on spending power…the non-performing enterprises are doomed to close down and consequently the vacancies that have been witnessed in various malls arises,’’ said Njeri Njoroge, a senior property manager at real estate company Regent Valuers International Kenya. Nairobi already has 391,000 square metres of existing mall space with an additional 470,000 square metres in the pipeline, according to Knight Frank’s ‘‘2016 sub-Saharan Shopping Centre Development Trends’’. By producing an almost same product, the mall industry has pushed itself into cannibalization, a concept that refers to a reduction in sales volume, sales revenue, or market…