Three bedroom apartment to let in Westlands

Five bedroom all-ensuite townhouse for sale

A spacious and luxurious townhouse to rent in Parklands

Three bedroom apartment to let in Parklands

Parkwood villas 4br syokimau

Tilisi 3br apartment

Great wall 3br apartment

Lavington offplan apartments

Makumbi apartments syokimau

Market, Along Manyanja Rd, Nairobi, Kenya

Umoja block sale apartment

4br townhouse own compound

MOONVALLEY 2br kileleshwa

Studio, 1-3 bedrooms Apartments

3-Bedroom Apartment

3-Bedroom Apartment+Dsq.

Studio,1,2 & 3 Bedroom Apartments for Sale

Yaya Centre, Argwings Kodhek Road, Nairobi, Kenya

One-Bedroom Apartment

2-Bedroom All En-suite

3 Bedroom Master En-suite + Dsq

3-Bedroom (Two En-suite) at Kileleshwa

One-Bedroom Furnished Apartment

2-Bedroom Fully Furnished & Serviced Apartments

2 Bedroom Apartment

Godowns For Sale in Industrial Area

E-Logistics Solutions Limited, The Eco Green Business Centre, Kenya

Grade A Warehouse

Commercial Building

Commercial Office Space

4-Star Hotel

The United States, Germany and Canada are expected to be the top three sources of global capital flows to real estate in 2021.

The latest instalment of the Active Capital report by Knight Frank has predicted that the focus of capital flows in 2021 will principally be between liquid, global safe-havens, as investors continue to seek out true diversification.

However, core, income-producing assets in ‘near-neighbour’ locations will also attract demand at a time when some physical travel remains subject to restrictions.

With the potential for more distress to be seen in 2021, investors from private equity funds, private capital and debt funds could also consider cross-border transactions further afield.

Global capital flows for H1 2020 were 23% lower than the same period in 2019 as the economic effects and physical restrictions imposed by the pandemic spread. Just over 26% of transactions were cross-border; a similar level to 2019.

However, this is largely due to a combination of locations outside the initial epicentre of the pandemic seeing strong first-quarter inflows, and transactions commenced before COVID-19 disruption bolstered the figures.

The report states that the office sector will continue to play a prominent role in global allocations, particularly in global gateway markets. This is because investment flows into specific office geographies have demonstrated particular resilience over the past cycles.

It further predicts more distressed assets coming to the market next year as fiscal and monetary support by governments unwinds.

“In many destinations, the lack of stock available for sale has limited transactional volumes. While governments and central banks support economies- although many are now in recession -we have yet to see much fallout in real estate,” it reads.

The report also predicts greater market supply in in prime property markets for rotational reasons in 2021, following the typical five-year financing terms now dated from 2016.

“In short, we should expect to see a range of assets- from the traditional office and through to the industrial, residential and alternatives sectors coming to the market for rotational reasons in 2021, even if some investors extend their business plans. These should offer a mix of cyclical and core opportunities,” it adds.

For gathering market signals, the report suggests the usefulness of investors monitoring private equity activity, which is often the first mover into a market and therefore a leading indicator.

Global capital flows will further be influenced by currency and hedging benefits, oil, geopolitics and travel disruption.

Read; <a style="color: #ff6600;" href="https://estatecloud.co.ke/africa-property-investments-supported-by-domestic-capital/">Africa property investments supported by domestic capital</a>

Around 300 property professionals are expected to attend this real estate event. The summit focuses on all types of built development to develop the future African city and will bring together some of the leading experts within the commercial, industrial and residential real estate sectors.

&nbsp;

The Central Bank of Kenya recently published the residential mortgage survey of 2016 which details developments and challenges in the mortgage market over the last year. In addition, the annual survey describes the size of mortgage portfolios for banks, mortgage loan characteristics, mortgage risk characteristics and the obstacles to mortgage market development.

According to the survey, the outstanding value of mortgage loan assets increased by 8.1 per cent from KSh. 203.3 billion in December 2015 to KShs. 219.9 billion in December 2016, a growth of KShs. 16.6 billion. In relation to this, the outstanding value of non-performing mortgages increased from KShs. 11.7 billion in December 2015 to KShs. 22.0 billion in December 2016, which represents 10 per cent of gross mortgage loans.

In 2016, mortgage loan accounts decreased by 1.5 percent from 24,458 to 24,085 after commercial banks tightened credit standards while the average mortgage size increased by 9% from KShs. 8.3 million in 2015 to KShs. 9.1 million in 2016 as a result of increasing property prices.

The same year saw an increment in the mortgage options for Kenyans to following the entrance of Sidian Bank in the mortgage market. In total there are now 35 institutions offering mortgages up from 34 in 2015. With respect to mortgage risk characteristics, the three main factors for households were; ability and willingness to repay, sustainability of the borrower’s income, legitimacy of the property among other factors.

For businesses, the main factors to be considered for a mortgage were the ability to pay from the cash flows and length of business operation, other existing debts etc. In general, banks mostly financed mortgages in cases where the value of the loan was less than the value of the mortgage with most banks pegging it at 90 percent maximum loan to value ratio.

Following the interest rate capping which came to effect on 14th September 2016, the rate of interest charged on mortgages was reduced significantly to an average of 13.46 per cent from 18.7 per cent in 2015, a net decrease of 5.24%. The capping law may also have increased the intake of fixed rate mortgages as variable rate mortgages decreased by 27.2 per cent in 2016. Although demand for mortgage has increased after the capping law due to perceived affordability, banks have been more rigorous with credit standards to minimize risk such that actual mortgage loans have been less than demanded.

According to the survey, some of the most notable obstacles to mortgage market development include low levels of income, high incidental costs, difficulties with property registration, access to long-term finance, high cost of land for building, stringent land laws, and others. The challenge for banks and other financial institutions is still to find the means to reach the low-income segment.

Residential Mortgage Survey for 2016

Running a startup is hard work, running a startup in Nairobi is even more difficult. An entrepreneur in Nairobi is often faced with challenges that are more acute in the Kenyan capital than other cities, especially the snaking traffic.

The 2011 IBM Commuter Pain Survey found that Nairobi roads were the world’s fourth-most congested after Mexico City, Shanghai and Shenzhen.

Startups and established fledgling small and mid-size enterprises (SMEs) in the city are faced with crippling traffic, high energy costs and expenses. To survive businesses have had to be more creative and careful with how they spend their capital, which is even more difficult to access due to the tight credit market.

One area where a new paradigm shift has emerged and is lowering the cost of business in the startup and SMEs space is in the office rental market. Businesses are opting to use space as and when needed through the flexible office space concept which has “ubernized” the property market.

Employees in engineering or agribusinesses are often out in the field or at client sites and hardly at the company offices. Additionally, the increased use of apps, software and faster internet connectivity means that workers can file reports in the field and no longer have to carry paperwork back to the office for manual filing. Which begs the question - if most of your staff are on the field why would you pay for ample office space that is seldom used?

Businesses are realizing that they can save on rent and startup costs such as buying office furniture, providing staff meals, beverages and utility bills by renting space for a few hours in the month, e.g. when a company-wide meeting is being held. Flexible office space is also ideal for employees whose work is seasonal such as auditors, freelancers or companies that have come to the local market to carry out specific tasks.

Renting office space on a need-be basis frees up capital for more productive activities and to fuel future growth.

Flexible office spaces are also proving to be a vital tool for talent attraction and retention especially amongst millennials. A 2017 survey by Flexjobs.com found that 69 per cent of millennials will trade in other work package benefits for better workspace.

Nairobi’s chocking traffic coupled with the growing penetration of affordable and fast internet connectivity also makes Kenya’s capital ideal for flexible office spaces. Hours spent on commuting to and from work can be better used working from home.

Benefits of flexible office spaces are also shared by landlords who can use this model to reduce the ever rising vacancy rates. Nairobi’s office market space is characterized by a glut which is set to continue as more developers add space to the market.

In a perfect world, landlords would prefer to have large and well-oiled corporate tenants signing long leases but disruption is showing us that today’s titans of industry may not be there tomorrow. Nairobi is replete with examples of companies that have either relocated their offices to other regions or have scaled down operations and, in the process, leaving landlords at a loss. The type of tenants that sign long leases are not always guaranteed and to keep vacancy levels low, landlords in turn should be willing to cater for flexible office space users.

Finally it is important to note that today’s startup has the potential to be the next conglomerate. As a startup matures, its office space needs are equally expected to grow which will in turn create opportunities for landlords and tenants to enter into new and permanent arrangements. But until then, the flexible office space should become the norm rather than the exception. This model is proving to offer a win-win solution for both the tenant and the landlord.

The Writer, Joanne Bushell is the Country Manager at Regus

Why digitization, cost concerns and oversupply are driving demand for flexible office spaces

African Real Estate & Infrastructure Summit

Nairobi, Kenya – High-net-worth individuals (HNWIs) in Kenya have allocated the largest portion of their wealth (28%) to real estate investments, which excludes primary residences and second homes, according to the Knight Frank Wealth Report 2017.

Personal businesses make up 20% of their wealth, while investments in equities, bond, cash, precious metals and similar items makes up 18%, according to the survey of nearly 900 of the world’s leading private bankers and wealth advisors. Primary residences and second homes, which are excluded in calculating individual net worth in the Wealth Report, make up 14%, while collectables (art, wine, cars etc.) make up 8% of total wealth for Kenyan HNWIs.

Globally, HNWIs allocate 25% of wealth to investments, 24% to real estate investments, 23% to personal business, 16% to primary residences and second homes, 6% to collectables and 6% to other categories of investments.

Ben Woodhams, Managing Director at Knight Frank Kenya, said: “Kenyan HNWIs clearly realise the long-term stability that property investments offer in an otherwise volatile market together with the good returns that the sector has demonstrated in the past.”

The 11th edition of the Wealth Report shows that up to 900 Kenyans became dollar millionaires in 2016, raising the tally of local HNWIs – those worth US$1 million (Sh102 million) or more in assets excluding primary residences – to 9,400 people from 8,500 in 2015. Majority of them – 6,800 – live in Nairobi.

In deciding where to buy properties to live in, Kenyan HNWIs are prioritising education for children, followed by personal security, safe havens for capital, opportunity for capital appreciation and lifestyle.

Kenya’s super-rich typically own up to three homes (primary and second homes) on average, much as their global and Africa counterparts. Majority of them own homes locally (74%), in Europe (74%) and North America (16%), while 5% have bought houses in the Middle East.

Kenya’s super-rich typically own up to three homes (primary and second homes) on average, much as their global and Africa counterparts. Majority of them own homes locally (74%), in Europe (74%) and North America (16%), while 5% have bought houses in the Middle East.
Over the next two years, 46% of resident Kenyan HNWIs are likely to buy additional homes within the country, while 43% are looking at outside the country.

In addition, 59% of HNWIs in Kenya are looking to invest in commercial properties locally, while 44% are looking to buy abroad. Globally, 44% of HNIWs are looking to invest in commercial property in countries of residence, while 32% are looking at outside their countries. Of the Kenyan HNWIs looking to invest in commercial property abroad, 53% prefer Europe, 12% North America and 6% the Middle East.

Kenyan HNWIs are raising their interest in property sectors, with 63% eyeing residential, 56% offices, 31% retail, 25% leisure and 13% industrial, according to local data from the Attitudes Survey.

The survey’s respondents said 68% of Kenya’s wealthy are likely to own a home locally, while 4% of the global HNW population look to own homes in Kenya – led by the UK HNW population where 63% fancy owning a home in Kenya, followed by 16% of South African HNWIs, and 11% of Spanish, Mauritians and US HNWIs. About 5% of the super-rich in Uganda, Tanzania, Nigeria, Ghana, Switzerland, France, Canada and Lebanon are also likely to acquire homes in Kenya.

Interestingly, Kenya is currently among the top-five most popular second-home locations for Africa’s ultra-high-net-worth individuals (UHNWIs). These insights come even as prime residential prices in Nairobi decreased by 2.1% in 2016, making it more attractive for trophy house hunters. Prime residential houses are currently priced from US$800,000 (Sh81.6 million) in Nairobi.

“With the upcoming election, we have noted a slow-down in development. This will allow the market to re-absorb the oversupply which will reverse the marginal price decline,” Woodhams said.

The survey also established that 69% of Kenyan HNWIs are likely to invest in commercial property locally, while up to 4% of the global HNW population would consider investing in Kenya’s commercial property sector. The latter are led by 38% of UK’s and 25% of South Africa’s HNW populations, with 6% of the super-rich in Ghana, Nigeria, Mauritius, Greece, UAE, Germany and Canada also expressing interest.

“The current foreign interest stems from the East, with investors from India and China making inroads, whilst much of the interest from South African funds seems to have been distracted by opportunities in Eastern Europe,” Woodhams said.

This time of the year could not be more different and unexpected compared to the same period last year. In contrast to the prevailing hot weather in Nairobi over the past 2 months, heavy rains were the more abundant condition then. And when the downpour subsided, a number of home owners and property developers were left with a good deal of expenses in form of repairs and maintenance, and for some real estate companies, <a href="https://estatecloud.co.ke/court-order-saves-green-park-estate-from-demolition/">court cases</a>.

A more recent phenomenon, the cyclone Idai, which has been termed the worst natural disaster in Sub-Saharan Africa in recent times did much worse and on a larger scale. It will take years to rebuild not only livelihoods but the property destroyed. The culprit in both cases however was something beyond the control of affected parties, but impactfull enough for them to review earlier decisions as well as what the future holds. This is climate change.

The periods of heavy rainfall experienced in Nairobi last year and other extreme weather events in different parts of the world adds another layer to the risks to ROI. Investors are now also more exposed to the elements of nature, and these are expected to be more pronounced as the effects of climate change continue to show.

This is the theme of a new <a href="https://americas.uli.org/research/centers-initiatives/urban-resilience-program/climate-and-real-estate-investment/">study</a> carried out by US-based Urban Land Institute (ULI) to evaluate the impact of climate change on real estate investments. The report found that the threat to asset valuation resulting from climate change has never been more real but the greater concern is the complexity of climate risk and its mitigation.

“Understanding and mitigating climate risk is a complex and evolving challenge for real estate investors,” said ULI’s CEO, Edward Walter. “Risks such as sea level rise and heat stress will increasingly highlight the vulnerability not only of individual assets and locations, but of entire metropolitan areas.”

Investors respond by changing how they deploy capital based on the potential risks. The report says that capital flow is expected to follow locations and assets perceived as more secure from climate risks while high-risk assets will eventually see a mark down in price by the markets.

According to the report, some of the strategies investors are using to future proof their investments under the prevailing circumstances include mapping physical risk for current portfolios and potential acquisitions, incorporating climate risk into due diligence and other investment decision-making processes, portfolio diversification and insurance among others.

Next; <a href="https://estatecloud.co.ke/nairobi-office-space-supply-grew-at-a-23-6-cagr-between-2012-and-2018/">Nairobi office space supply grew at a 23.6% CAGR between 2012 and 2018</a>

Real estate investors to be on the look out for climate change will affect real estate investments

Auctioneers of a Mombasa resort have cut by half the initial asking price after it emerged that the property which has been listed for sale for the past three years has continually failed to elicit demand.

The Nyali-based property overlooking the Indian ocean is a reflection of the rocky state of property markets in Kenya where overleveraged investors have fallen on hard times following an increase in repossession by financiers.

Auctioneers have now been forced to cut the property's initial price of Ksh. 6 billion to Ksh. 3 billion according to the Standard. The auction spree has spilled over from individual homeowners to commercial investors across the country.

But auctioneers are not smiling to the banks either as both buyers and sellers have been shortchanged by a tough economy.

Auctioneers have reported that auction sales have dropped to just 10 percent from 70 percent in the past. Joseph Gikonyo, Managing Director for Garam Auctioneers told the Standard that the current situation can be attributed to the poor state of the economy, the government’s prohibitive fiscal policy which has suffocated SMEs.

Some of the notable commercial properties which have come under the auctioneer’s harmer include the Ksh. 240 million <a href="https://www.kenyans.co.ke/news/49912-media-tycoons-luxury-hotel-set-ksh240m-auction">Westend</a> Hotel, NextGen Mall, Boma Hotels, Jacaranda Hotel, and Nairobi <a style="color: #ff6600;" href="https://www.pulselive.co.ke/bi/finance/nairobi-upperhill-hotel-now-joins-growing-list-of-establishments-set-to-be-auctioned/vfwms9y">Upper Hill</a> Hotel.

With property worth billions of shilling lying idle, especially in the high-end segments, the effect is that a lot of cash that could be in circulation is left packed in concrete. However, experts expect the situation will ease in the near term.

The latest version of the Wealth Report shows that the number of Kenyans who are dollar millionaires fell by 499 in 2019 on the back of a slow economy. Manufacturing, real estate, and technology sectors were the major areas of wealth creation in Kenya according to the Knight Frank report.

Read; <a style="color: #ff6600;" href="https://estatecloud.co.ke/commercial-office-report-recommends-switch-to-grade-a-offices-in-2020/">Commercial Office Report recommends a switch to Grade A offices in 2020</a>

<a href="https://estatecloud.co.ke/property/list-of-land-available-for-sale/">List of Land Available for Sale</a>

Estate Cloud

Estate Cloud

Global Capital Outlook For 2021

By Estate Cloud - over 2 years ago - Kenya

RELATED ARTICLES

CONTACT

CONNECT

SUBSCRIBE