Point Properties Ltd – Articles of Interest

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…

Gross non-performing loans (NPLs) rose 15.8 per cent to Sh170.6 billion in March compared to Sh147.3 billion in December, the Central Bank of Kenya (CBK) says in its first quarter industry report. “Real estate sector recorded the highest increase in NPLs over the quarter by Sh5.9 billion or 42.3 per cent. This is attributable to slow uptake of housing units,” the CBK report says, adding that the pile of bad loans in the personal/household sector increased by Sh5.7 billion or 21.5 per cent between December 2015 and March 2016 “as a result of negative macroeconomic drivers such as job losses and delayed salaries.” Story by Victor Juma. Read more Source

Starter Homes Are Still Unpopular Among Many

Phase One comprising 120 units is ready for occupation. The uptake of these units has been good. Question :Is the original goal of First Homes — offering starter homes to first-time buyers — being achieved? Answer:Our idea was to provide affordable houses for young people that have just started working to buy and avoid paying rent. However, most of our customers have been investors buying to let out the units and not the youth buying to live in them You had earlier intimated that the two-bedroom houses, which were selling for about Sh3 million, were in high demand compared to the bedsitters. Question:Why is that so? Answer: This could have been because people want to keep to what they are used to. Many are used to living in one and two-bedroom houses. The concept of studio apartments is relatively new in Kenya. However, this has since changed and the uptake of studio apartments is now better. Read more at: https://www.standardmedia.co.ke/lifestyle/article/2000201495/starter-homes-are-still-unpopular-among-many

High Interest Charges Bring Mortgage Business to a Standstill

Construction mortgages at the bank are up to 21 percent from 17 per cent. Tough conditions At Kenya Commercial Bank, interest rates have gone up to 20 per cent from 14.9 per cent with a further stringent condition that an individual should have a net of Sh300,000 as a basic qualification for any mortgage. A customer at KCB is now required to pay Sh100,000 as monthly premium for a Sh5 million house for a minimum period of ten years. Prior to the revision, the cost was between Sh15,000 and S20,000 less. At Housing Finance, the interest rates currently average 21 per cent after the review, a trend that is across all the banks. On Friday, the Central Bank sought to inject Sh6 billion into the money markets through reverse repurchase agreements, saying liquidity was skewed in the money market. Traders say the CBK may be seeking to help smaller lenders, who have found it difficult to borrow from larger counterparts after the seizure of a second-tier bank last month. It’s not clear if the CBK action would help contain surging interest rate by banks. However, analysts say high rates are not expected to ease out soon as a tight Central…

Property in Nairobi It is a given that buying Nairobi real estate can be the best way to amass a fortune in a short while. Investing in property you can spend a relatively small amount of money to control a larger asset in the future. Your investment is real and productive, not to mention the growth of its value. Historically, land for sale in Kenya has been one of the best hedges against inflation and turmoil. Generally, people will always require a place to call home. Though inflation may come and go, your properties will for sure always retain their intrinsic value. Ownership Benefits Acquiring Houses for Sale in Nairobi or other properties for sale in Nairobi have a few advantages that you will find them extremely useful. They are: You maintain full control. You can purchase or sell according to your agenda and necessities. It is a great inflation barrier. Owning a property is better than just generating revenue. It is a real asset. That means it contains a value independent of any currency’s ostensible value. Real estate has multiple uses. For the land you buy, it can be used for agriculture or forestry while you wait for the property investors to take an interest. The apartments for sale in Nairobi or Mombasa…

Three real estate developers are building low-cost houses along Mombasa Road targeting first-time buyers with prices starting at Sh1 million per unit. The developers — Rogam Investments, Karibu Homes and Peninsula Development Company — are pitching to buyers that the monthly mortgage payments for the units are equivalent to their current rent. At an interest rate of 15 per cent per year, a Sh1 million house would require Sh12,000 a month for a 20-year mortgage while a Sh2.5 million house would require Sh31,000 a month at the same interest over a similar period. Rogam Investments is undertaking the project as a mixed development of studios and apartments in Mlolongo, Machakos County. The project, dubbed First Homes, has a sale value of Sh500 million. The firm said that it was aiming at attracting first-time home buyers such as working recent graduates. Mr Aaron Gitonga, a director at Rogam Investments, said the firm chose to serve the low-end market because it is under-served, unlike the high-end one which has signs of saturation. “This is a market where there is a lot of demand but not many developers are looking at it,” Mr Gitonga told the Business Daily. First Homes has studio apartments…