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Feasibility study for the Mombasa Gate Bridge linking the island to South Coast has been completed. Michael Mwangi, the project consultant, who is also the environmental impact assessment team leader, said the US $777.8m bridge will be complete in 4 years. The environmental and social assessment, has begun, and it will take about three years and then pave way for actual construction works.

The Repcon Associates Managing Consultant also said that, during consultations in the first stage of the study, it was agreed that the bridge will start on Lumumba Road, near Jela Baridi Prison, Majengo. It will cross the railway station and Moi Avenue along Archbishop Makarios Road, cross the Likoni Channel at Mwenza Creek and then join the Southern By-pass at Ziwani through the Mtongwe road.

He added that a lot of displacement is expected at the site of an interjection near Archbishop Makarios Road. The consultant, however, said that they were yet to establish the number of people who will be displaced.

According to the design, the cable-supported bridge will be 69m from the highest water level and 1.4km long.

“The total length of the road will be 10.5km,” Mr Mwangi told the first stakeholders meeting at Royal Castle Hotel, Mombasa. “We will have four lanes and provide sidewalks for pedestrians,” he added.
<div id="in-article-p-mid">He said there were nine options on where the bridge should be built and the agreed location will allow operations on both the Likoni and Mtongwe channels to continue. Consultations with the Kenya Ferry Services (KFS) management revealed that ferries could not handle the congestion at the channel, he added.</div>
<div></div>
“The management noted that even with more ferries the congestion cannot be dealt with, the channel being the only connection to South Coast,” he said.
<h5>Stuck in traffic</h5>
“For instance, on Wednesday, motorists were stuck in traffic for more than four hours at Likoni Channel after Mv Jambo ferry was withdrawn for routine maintenance, leaving only Mv Nyayo, Mv Harambee and Mv Likoni operational,” he added.

The motorists complained of delays occasioned by what they termed as poor management of the vessels. Mv Jambo was back in operation at around 9pm.

Mr Mwangi noted that the lack of a road connection between the island and the mainland poses monumental challenges to the economic development of Mombasa and Kwale counties. “Tourism has also suffered in South Coast,” said Mr Mwangi. “Ferry service is no longer viable,” he said.

The bridge will also boost the Mombasa Special Economic Zone project. Mombasa Lands, Planning and Housing executive Edward Nyale assured residents to be affected by the project that they will be relocated. “Your interests will be well taken care of,” said Mr Nyale.

Source; <a href="http://constructionreviewonline.com" target="_blank" rel="noopener">Construction Review</a>

Tatu Industrial City has purchased an extra 2,500 acres from Belgian plantations firm Socfinaf for the expansion of its multi-billion shilling mixed-use development in Kiambu County.

Stephen Jennings, chief executive at Rendeavour Group that owns Tatu, said the expansion follows increased interest in industrial, commercial and residential plots from local and foreign investors of the initial 2,500-acre plot.

“Ours is a 25-year view of what Kenya’s economy will be since all fundamentals as indicated by the World Bank, among other market surveys, show the economy has defied all odds to grow at 6.5 per cent — the fastest rate in the world that grants investors the best possible returns,” he said.

“It jumped 40 places on Ease of Doing Business Index, which creates a positive long-term view for us. We buy land, develop it to add value and create a lifestyle experience that solves traffic, water, energy and environmental challenges as sociated with cities.”

Mr Jennings, who was accompanied by Rendeavour country head Nick Langford, said establishment of light industries had also helped create demand for other related facilities such as retail centres, offices and residential houses for upper, middle and low income groups. Mr Langford said Rendeavour had found a strategic partner who would develop a 20,000 capacity modern stadium while another had agreed to put up a 180-room three star hotel.

On Kijani Ridge residential development, the firm said 217 parcels of the buy-build quarter-acre plots are currently under development with 84 plots still available.

Rendeavour has also agreed to take up land for development of Tatu Waters, a 2,700 unit residential development com prising condominiums and townhouses, with social amenities such as eco-parks, schools and hospitals incorporated.

Mr Jennings announced that a Mombasa-based lifestyle developer had purchased 30 acres to put up 1,400 units for middle income earners at Sh5 million each. Another developer has purchased land for building of Sh2 million to Sh3 million houses for low-income earners.

Tatu City, he said, had also hived off a 200-acre portion for development of apartments targeting upper-middle income earners that will retail for Sh9 million. Of the reserved 459-acre industrial plot, 280 acres has been sold off with 30 acres currently booked and agreements signed with various light industry companies. Another 30 companies are still negotiating with the firm.

Companies on site include Bidco Africa Group, which is building a soft drinks bottling plant, Dormans Coffee that is putting up a roasting-cum packaging plant and their Africa headquarters, Maxam distributors, Chandaria Industries, Kim Fay and animal drugsmaker Coopers (K) Ltd. Nova Academies recently opened a campus in Tatu City and admitted 128 girls to the secondary section while the primary division is set for completion by next January.

The World Bank Group estimates that by 2030, three billion people, or 40 percent of the world’s population will need new housing units. A recent study by McKinsey and Company delves into the options to consider to achieve affordable housing globally. This comes at a time when there is skyrocketing demand for affordable housing especially in developing countries.

The McKinsey report points out that access to land is among the most common constraints preventing housing development and one of the reasons building costs are so high. The study which considered the situation in various cities around the world, found out that in cities such as Auckland and Rio de Janeiro, the cost of land often exceeds 40 percent of total property prices while in some cases such as San Francisco, extreme scarcity of land makes it account for as much as 80 per cent of the home price.

Unlocking land at the right location and price is one of the most recommended solutions to the problem.

By global estimates, releasing the full potential of land for housing development can reduce the cost of owning a standard housing unit by at least 20 per cent. It is no doubt that underutilization of land is representative in most cities and the traditional low-rise spread out standard planning doesn’t help matters much.

One way to maximize the potential of existing space amidst the land constraint is to increase the density of housing in existing areas. The McKinsey study found out that promoting density around transit rather than encouraging sprawl and longer commutes is more compelling in congested cities.

A good example is Seoul which allows floor-area ratios that are up to 20 times higher in better-connected neighbourhoods than in more distant areas. In cities with such regulations in place, developers could be allowed to build on residential parcels that are not taking advantage of currently allowed density.

Riyadh, Saudi Arabia for instance has some 40 square kilometres that are zoned residential but are not being utilized, while about 40 percent of all zoned residential land within Nairobi is vacant.

Cities urgently need to step up home building efforts in order to match residents demand for more decent and affordable housing that will further inclusion and eliminate the economic gap usually occasioned by housing shortages.

In addition to finding the land, cities have to remove other barriers for instance the regulatory stock pile quite often derailing investor efforts. The construction industry too has to make changes and innovations that will enable it deal with the challenge effectively.

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Tackling the Affordable Housing Challenge

Nakuru is the fourth largest town in Kenya, located approximately 160 km North-West of Kenya’s capital, Nairobi. The town also serves as the headquarters of Nakuru County, the fourth largest county in Kenya in by GDP per capita with an estimated population of 376,979 people as at January 2018, according to the County Government of Nakuru.

A recent survey carried out by Cytonn Investments identified the main factors driving the real estate market in the town. These include positive economic growth, devolution, population growth, and infrastructural developments.

Nakuru County’s GDP per Capita is the fourth highest in the country after Kiambu, Nyeri and Kajiado at USD 1,413. The rising per capita income has increased demand for real estate in Nakuru Town.

Devolution has also opened up Nakuru Town and thus creating demand for housing units, retail spaces and office spaces, which host investors and government officials. Further, devolution has attracted well-oiled individuals like entrepreneurs, private investors and government institutions such as public service boards to the county headquarters.

<strong>Related</strong>; <a href="https://estatecloud.co.ke/nakuru-county-to-get-cement-plant/">Nakuru County to get cement plant</a>

Currently, Nakuru Town has an estimated population of 376,979 that has grown from 286,411 as at the 2009 census while the County has a population of 1,891,739, according to the County Government of Nakuru. This has increased demand for real estate developments for residential as well as commercial purposes.

Nakuru has also benefited from infrastructural developments from the National and County developments. Early this year, the Kenya Urban Roads Authority (KURA) announced plans to upgrade 22 km of roads within the town at a cost of Ksh. 1.8 billion.

The County Government of Nakuru also in 2017 announced plans to upgrade Lanet Airstrip, to a fully fledged airport that would accommodate huge passenger and cargo planes. Details of completion timelines are yet to be disclosed.

These initiatives will improve accessibility to the town and thus open it up to real estate development.

However, the town’s real estate market has also faced challenges including infrastructure development, access to funding and inadequate planning.

Nevertherless, the market has begun welcoming institutional developers who are coming up with investment grade housing units and the urban population is appreciating them as evidenced by high uptakes of 39.7% for mid-end apartments and 22.9% for high-end apartments, additionally, indicating that developers can exit developments in 3 years.

The town’s residential sector recorded average rental yields of 4.2%, price appreciation of 4.6%, hence a total return of 8.8% with a price range of between Ksh. 6.1m and Ksh. 13.0m for high-end housing, and between Ksh. 3.6m to Ksh. 4.9m for middle-income housing. Apartments and detached units had total returns of 10.7% and 6.8% on average respectively.

<strong>Read;</strong> <a href="https://estatecloud.co.ke/riparian-land-proves-costly-for-developers/">Riparian land proves costly for developers</a>

Based on the survey, the market prefers apartments as they attract lower rental rates thus more affordable with rents at on average Ksh. 23,970, 56.4% lower than detached at Ksh. 55,000.

Nakuru Town land markets recorded an annualized capital appreciation of 8.8% this is attributed to speculation and increased demand for land in residential zones. On retail space, the survey found that Nakuru has rental yields of 5.8% on average as compared to Nairobi, Mombasa and Kisumu that have average rental yields of 9.7%, 10.0% and 9.9%, respectively due to the low rent.

The study also established that Nakuru Town lacks Grade A office spaces with most of the buildings being Grade C. In terms of performance, office spaces in Nakuru Town record average rental yields of 5.4%, 3.5% points lower than the 8.9% for mixed-use developments in the market.

<strong>Also Read;</strong> <a href="https://estatecloud.co.ke/the-process-of-getting-a-mortgage-in-kenya/">The process of getting a mortgage in Kenya</a>

&nbsp;

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Nakuru town real estate market to maintain growth pattern

Tatu City Acquires additional 2500 Acres from Socfinaf

Global prime property markets have shunned increasing growth, declining to an average growth rate of 1.3 per cent from 4.3 per cent just two years ago.

'The Prime Global Cities Index, which tracks the movement in luxury residential prices across 45 cities globally, registered its lowest rate of annual growth since the final quarter of 2009, when the world was in the grip of the financial crisis.'

The index featured two African cities, Cape Town and Nairobi, with the index showing that Cape Town was the better performer. The South African city recorded a price growth of 2.1 per cent over the past year ending in the first quarter of 2019, beating global property renowns like London, New York, Hong Kong and Monaco.

However, Nairobi’s luxury property markets were downbeat over the past one year, recording a price decline of up to -6.5% and -0.5% in the first quarter of 2019. The chief occasion, an oversupply in the city's high-end markets beyond the local levels of opulence, left high-end suppliers with only so much demand and the market correction set in.

The index ranked Nairobi at 42 out of the 45 cities surveyed. Following the economic events, high-end development a have somewhat subsided, but not completely.

The index, cites the slowing rate of wealth creation globally in 2018, political and economic headwinds, trade war threats and Brexit woes as some of the adverse factors to the markets leading to the decline.

The IMF projects that 70% of world economies will face a slowdown in 2019

Strong cities (mostly European) whose market beat the index, showed characteristically strong tenant demand, limited new supply and relative affordability. Seven of the top ten performing cities were European.

The Index is a valuation index tracking the top 5% of housing most markets in most cities. According to the index, on average the prices of luxury property have risen by 57.4% over the past decade.

<strong>Read</strong>; <span style="color: #ff6600;"><strong><a style="color: #ff6600;" href="https://estatecloud.co.ke/swiss-international-hotels-resorts-to-operate-sagana-resort/">Swiss International Hotels &amp; Resorts to operate Sagana Resort</a></strong></span>

By Kilundo Mbithi

As more and more people look for better ways to secure their financial future other than investing in stocks and shares, so interest in purchasing real property as an investment asset is increasing. After all, carefully invested real estate rarely loses money whereas all too often investments made into pension schemes or on the stock market fail to come to fruition.  It's no wonder then that more people want to know how to build a profitable property portfolio?

Here are seven tips that expert property investors abide by when looking for property that they can up-sell or rent out for profit...
<h2>#1. Analysis</h2>
Speak to agents and do your own research, find out how much rent you think you can comfortably get from a given property type in a given location.  With that figure in mind, never pay over 100 times more than the monthly rental cash flow for a property.  i.e., if you’re estimate that a property will return you KES 50,000 a month do not pay more than KES 5,000,000 for that property for you to achieve a good rental yield.
<h2>#2. Other People's Money</h2>
Understand and harness the power of OPM – other people’s money!  Sage investors have for long lamented the risk of putting your eggs in one basket. Similarly it is never advisable to commit 100% of your own personal wealth to purely invest in property. Instead try to balance your own little input with other credit facilities at your disposal. In a nutshell, don't expose yourself too much.
<h2>#3.  Don't Buy the Future</h2>
Don’t invest in future potential, invest in real potential.  If an area is considered to be coming up because in the future it will benefit from better infrastructure never bank on the investment being made…just know that if an area has already arrived and a particular property is already profitable, the future prospects for that property are already assured and make a far better bet than speculating to hopefully, maybe, potentially one day accumulate!  Speculators are ‘investors’ high on what I call “<em>hopium</em>”.
<h2>#4.  Cut of Any Emotional Attachments</h2>
Don’t make it personal – an investment is a purely objective profit making activity, therefore, don’t get emotionally attached to any particular property, or a seller of a property. Remain as objective as possible. As an investor, perhaps you should learn to see buildings as nothing more than a mass of concrete, metal and glass subject to profit or loss.
<h2>#5.  Learn Constantly</h2>
Learn all you can from the wealth of brilliant books that have been published by property investors and real estate advisors.  You can bet your bottom dollar that there is something to be learned from someone who has been doing it for decades.  This will significantly reduce your learning curve that is often than not going to take you a couple of years and possibly loses here and there. As it is said, a wise person learns from his owns mistakes but a really smart person learns from his mistakes and those of others.
<h2>#6.  Research, Research, and Research Some More</h2>
Do hands on research – get out on the streets, visit letting agents and estate agents, look at property prices, rental rates, the popularity of a given area and only when you are certain about a location and a property type should you make a commitment to buy real estate.
<h2>#7.  Action</h2>
<p style="text-align: left;">If you do your homework, keep revising your facts and figures you should be confident in your own decisions. Do not be swayed by others who might say your plans will never work.  You have to have dreams and ambitions and visualize all your hopes and hard work coming to fruition.  Keep your feet on the ground and don’t be swayed by the negativity and limitation of others.</p>
<em>The Author is a Valuer &amp; Registered Estate Agent and runs an investor education &amp; coaching program at <a href="https://l.facebook.com/l.php?u=http%3A%2F%2Fwww.investorclinics.com%2F&amp;h=ATNKJo-4yW6_U53PJCYHVo31GXA2omm_fEu0S67L5brOKuuV5bNaUeLoJfxSGMKnbbJiTNfWHdK_Z4MiYUOjyC3VaKyoDMNImCcX_YQKNd27gosnrGmWP2mWBt8D3ju_-MEWQ-6aeH28">www.investorclinics.com</a></em>

How to Build a Profitable Property Portfolio

The Residential Rental Income Tax was by the Finance Act 2015 which introduced Section 6A in the Income Tax Act Cap 470 Laws of Kenya, which provides for a simplified tax regime on rental income. The tax is payable by any resident person (individual or company) from income which accrues in or is derived from Kenya for the use or occupation of residential property. According to the Act, a 10% tax rate on gross rental income is payable for rental income upto a maximum of Kshs. 10 million per annum.

The Finance Act, 2016 has now specified the minimum rental income chargeable to tax under the residential rental income tax regime.

From 9th June 2016, any person (company and individual) earning a gross rent of more than Kshs. 144,000 per annum (Kshs. 12,000 per month) and not exceeding Kshs. 10 million per annum (Kshs. 833,333 per month) is required to file the monthly Residential Rental Income Tax returns.

However, landlords with rental income below Kshs. 12,000 per month shall be required to file annual income tax return and declare this rental income together with income from other sources.

Where the rental income exceeds Kshs. 10 million during a year of income or a person has reason to believe that the rental income is likely to exceed Kshs. 10 million, the person shall inform the Commissioner of that fact before end of that year of income. Failure to notify is an offence under the Income Tax Act.

For exclusion, person who opts not to be subject to the residential rental income tax in favour of the old rental income tax regime (annual) shall notify the Commissioner in writing, at least three (3) months before the end of the year of income. The option not to be subject to residential rental income shall take effect in the subsequent year of income.

Under the Act, rental income earned by a Partnership is taxed on the partners according to their profit sharing ratio as per the Income Tax Act.

The tax point for the residential rental income tax is when landlords receive rent from their tenants, either monthly, quarterly, semi-annually or annually. However, returns must be filed monthly.

The new tax of 10% on gross rent became effective on <strong>1st January 2016</strong>. Eligible persons shall be required to file and make correct declaration through a simplified tax return via iTax System and pay tax due on or before the 20th day of month immediately following the month which the rent was received.

The residential rental tax will be a final tax and will be paid on monthly basis using a simplified online payment return. Therefore, eligible landlords shall not be required to file annual returns unless one has other incomes e.g. commercial rent, employment income, business income, farm income, etc. The returns must be filed online via <em>iTax.kra.go.ke </em>

This tax regime will have exemptions for rental income from commercial property, persons whose income is exempt from tax under the 1st schedule of Income Tax Act, non- resident landlords (as per Income Tax Act definition), landlords earning residential rental income of less than Kshs. 144,000 p.a., landlords earning residential rental income of more than Kshs. 10 million per year and persons who by writing to the Commissioner elects not to be subjected to the Residential Rental Income Tax.

Failure to file the residential rental income tax return by the due date of 20th day of the month immediately following the month which the rent was received shall attract a penalty of Kshs. 20,000 or 5% of principal amount due, whichever is higher. In addition, any tax not paid by the due date shall attract a penalty at 20% of the tax payable and interest of 1% per month.

Benefits of the Residential Rental Income Tax include simplified tax computation at 10% flat rate on gross rent instead of the 10% -30% rates in the old rental income tax regime and landlords shall not be required to produce records to account for expenses. Also, the tax is a final tax thus landlords will not be required to file annual returns if they do not have other incomes, and compliance is easy and cost effective.

Estate Cloud

Estate Cloud

Feasibility study for the US $777.8m Mombasa Gate Bridge project finalized

By Estate Cloud - over 5 years ago - Kenya

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