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…

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…