Distressed property

Nairobi, Kajiado and Mombasa top the list of counties with the highest value of distressed property sales according to data from Kenya’s second biggest mortgage lender, Housing Finance. Data from the mortgage lender’s recent bold auction revealed 68 distressed properties in Nairobi, including one commercial property. The properties were valued at over KES 800m.

Kajiado had 11 distressed properties valued at about KES 150 million while Mombasa had 25 distressed properties valued at KES 100 million.

An analysis of Housing Finance’s recent bold auction campaign shows that the distressed assets under sale were scattered over 8 counties with a distressed sale value of about KES 1.23 billion. The mortgage lender recently suffered a court case that awarded KES 1.2 billion to a family following a botched property auction.

Housing Finance has the highest non-performing mortgages in the market with a value of KES 7.66 billion (16% of mortgage portfolio) compared to Kenya Commercial Bank with KES 4.73 billion (7% of mortgage portfolio), according to a recent Centum research.

The research states that the auction campaign is part of the lender’s wider strategy to clean up its non-performing mortgage book in readiness for the aggressive move to the affordable housing segment and is not indicative of widespread distress in the real estate sector.

According to Knight Frank’s latest Prime Global Cities Index, the rising number of distressed properties in Nairobi has also affected prime residential values significantly, with lenders intensifying efforts to recover non-performing loans through sale of collateral.

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