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Nairobi Metropolitan Services (NMS) has restored operations of the Quick Response (QR) coding system for building approvals after nearly seven months.

Operation of the <a href="http://ccn-ecp.or.ke/" style="color: #ff6600;">e-construction</a> system of the Nairobi City County government had been halted in May following a takeover of building approval services in the city by NMS. 

However, the system was restored without the Quick Response code following a public outcry by industry stakeholders. &ldquo;It is notified to the general information of the public that the Nairobi Metropolitan Services has restored the quick response coding system under the e-construction permit system,&rdquo; reads the notice by <a href="https://twitter.com/nms_kenya?lang=en" style="color: #ff6600;">NMS</a> Director-General Mohammed Badi. 

Restoration of the QR system which is part of Nairobi County&rsquo;s e-construction system will quicken the process of obtaining building permits by developers since it eliminates the requirement for approvals to be physically stamped. 

Property developers and builders in Nairobi can now have their plans approved virtually by electronically submitting their development application documents, following the move by Nairobi Metropolitan Services. 

The QR system will reduce the time taken to approve building plans and successful applications will receive an e-construction permit. 

Maj. Gen Badi said the authority (NMS) has since gaining administrator access into the e-construction system&nbsp;incorporated competent processing of development applications for approval in a timely and predictable way. 

Nairobi Metropolitan Services said in the notice that commencing from Thursday, November 19th, 2020, it will no longer accept or admit development application documents for stamping as a final approval process. 

According to the directive, all development application documents that had been approved and verified between March 18 and November 18, need not undergo the QR coding as a mark of final approval. 

Major Gen. Badi said that NMS is committed to promoting efficiency and effectiveness in development approval processes and will continue to review the same to ensure improved service delivery.&nbsp;

Land price growth accelerated marginally in Nairobi in the first quarter of 2019, whilst slowing in the city's satellite areas according to Hass Consult’s latest land price index for the first three months of the year.

The overall growth was the sum of three very different types of price trends, the consultancy reported.

“We are clearly seeing the city and its surrounds emerge as three types of land markets, such that land price growth is becoming increasingly predictable in each area based on past rises and current land availability,” said Sakina Hassanali, Head of Development, Consulting and Research at Hass Consult.

A clump of now well-developed areas that experienced very sharp land price rises and giddy levels of construction are now correcting with their current potential levels now reached. Such areas within Nairobi include Upper Hill, Kilimani, and Nyari, as well as Spring Valley and Donholm.

“All of these areas have seen price rises well ahead of the trend for periods of a year or more, since 2015. But with development now well advanced in these areas and their narrative having moved to occupancy levels, land price growth has become subdued and even marginally negative in some locations,” she said.

Examples of such areas, now correcting from a period of overheating are Spring Valley where land prices fell by 0.62 per cent in the year to the end of March 2019, and Kilimani, where prices fell by 1.07 per cent over the year.

“In reality, these prices are not so much 'correcting' as standing still in the face of the now large inflow of new property,” said Sakina.

The second cluster of areas are those with ample land, where a great deal of purchasing is still underway, but ample supply has limited the competitive pressure on pricing. The strongest example of the well-supplied areas is Karen, which accounted for 31.5 per cent of all the land advertised for sale in Nairobi. Land prices in Karen rose by 3.22 per cent year-to-date up to the end of March.

Related; <a href="https://estatecloud.co.ke/international-slow-down-derails-high-end-property-markets-as-apartment-rentals-thrive/">International slow-down derails high-end property markets as apartment rentals thrive</a>

“Such ample land supply in areas such as Karen, Runda, Lavington and Westlands has made for somewhat more subdued price growth, although these areas all report positive increases in land prices in the last year,” said Sakina.

However, the strongest rises came in areas offering limited opportunities for new types of developments in desirable areas. These areas within Nairobi included Loresho, where land prices rose 9.95 per cent, Ridgeways, where they rose by 8.58 per cent, and Kitisuru, where they rose by 7.16 per cent in the year to end-March.

“All of these areas delivered price growth significantly above inflation, which is currently running at just over 4 per cent,” said Sakina. Together, the three price trends led to an overall rise in land prices in the 18 Nairobi suburbs monitored of 1.37 per cent in the year to end March, and of 1.48 per cent in the 14 satellite areas monitored.

“The mix continues to show what a resilient asset land is in Kenya, holding its value even as gold and oil both drop in pricing, and still growing strongly in the most desirable locations,” said Sakina.

Download the report here: [download id="3250"]

The last two months of the past year were not particularly interesting times for reals estate sales. The two months since November, apartments, houses and townhouses saw a huge decline in the total ask prices for 3-bedroom listings across the market.

According to DataFintech, in the two months since November, apartments, houses and townhouses saw a decline in the average rental revenue for 3-bedroom listings across the market. Apartments featured the least decline with 0.2%.

Houses suffered the largest decline of 25% while townhouses only saw a 2% decline in rental revenue during the period. Thus, apartments units remained higher than townhouses and houses over the past two months.

In a nutshell, all property types took a dip in the last month of 2017.

The total market value of all three property types by asking price increased for the month of December 2017 compared to the previous year with apartments having the highest increase while townhouses the least. The total value of apartments listed in the online market increased by Ksh. 2.1 billion more than the previous year.

The average rental price for 3-bedroom apartments in the year 2017 had a 5% increase compared to 2016. However, this was not the case with the average rental price for both townhouses and houses as they both saw a decline in the year 2017 as compared to the previous year.

Houses suffered the largest decline at 27% with townhouses suffering a 16% decline in rent, the market telling in no uncertain terms the items on demand.

The data was composed of more than 11,024 real estate units listed in online real estate platforms over the collection period.

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Residential Property Update

Kenya&#39;s National Treasury is seeking a consultant for the purpose of developing new national property rating legislation to replace the outdated Valuation for Rating Act of 1956 and the Rating Act of 1963.

National Treasury recently published the tender documents, saying the initiative will increase the tax bracket by drawing more property owners across the counties into the tax bracket.

&ldquo;Outdated property legislations imply low coverage by valuation rolls and tax base of properties that are ratable which further undermines the property rates,&rdquo; <a href="https://www.businessdailyafrica.com/bd/economy/treasury-seeks-64-year-old-property-rates-3246222" style="color: #ff6600;">told</a> Business Daily.

According to the National Treasury, replacing the old property valuation laws dating back to 1956 will improve county governments&rsquo; own-source revenues which hit a four-year low of KSh 32.49 billion in 2017/2018 financial year before recovering slightly to KSh 35.48 billion in 2019/2020.

Treasury holds that a new valuation law will expose the rise in property values over time, providing the government with a basis to collect higher rate payments to reflect the rise in value over time.

The National Treasury said that the old valuation roll has never been updated even though best practice requires the valuation roll to be updated over ten years.

This means the government has not been able to realize revenues accruing from accumulated property values across the country. Furthermore, most counties currently use outdated valuation rolls valuation laws with non-existent rating authorities.

Treasury said the valuations can be legally challenged hence the need to have a new legal framework that would correct these anomalies as soon as possible.

Data from the counties have shown that rates are their single largest source of revenue yet efficient collection has been amiss. In 2018 data from the Nairobi County Budget Office revealed that <a href="https://estatecloud.co.ke/land-rates-largest-source-of-county-revenue/" style="color: #ff6600;">land rates</a> were the single largest contributor to local revenue.

In October 2020, Nairobi Metropolitan Services (NMS) said it is set to unveil a new property valuation system that will reset land rates in Nairobi County to prevailing market conditions.

Another recent bid to improve the country&rsquo;s valuation regime is by the Ministry of Lands which recently announced that it is already working on a new <a href="https://estatecloud.co.ke/national-land-valuation-index-under-development/" rel="noopener" style="color: #ff6600;" target="_blank">Land Valuation Index</a> to guide land valuations for investment and other purposes across the country.

National Treasury Planning New Property Rating Legislation

Nairobi land markets recorded marginal growth in first quarter

Listed mortgage lender, HF Group, has been making good its promise to slash house prices by 30 per cent. Yesterday it handed over 248 housing units worth KSh. 1.9 billion to owners under its Shika Nyumba campaign.

Buyers were given access to the houses located along Kamiti Road off Thika Super Highway. The project which was developed under a joint venture agreement between HF and Richland Development Limited contains two and three-bed roomed apartments selling for between KSh. 8.5 million and KSh. 9.5 million respectively.

Speaking during the handover ceremony, HF Group CEO Robert Kibaara attributed the quick uptake to the recently launched Shika Nyumba campaign which has helped create widespread awareness of the listed lender’s projects.

HF Group had announced that the promotion would be giving away 700 units at the said discount, a promise they are well on their way to fulfill. Hf is also providing mortgage financing for interested buyers under the promotion.

Related; <a style="color: #0000ff;" href="https://estatecloud.co.ke/housing-finance-group-to-slash-prices-by-30-per-cent-on-700-houses/">Housing Finance Group to slash prices by 30 per cent on 700 houses</a>

Our mission is to empower Kenyans to own property specifically affordable housing with modern features and amenities that improve the quality of life for individuals and communities both now and in the future,’’ Kibaara said.

He added that HF Group is committed to the affordable housing agenda and will continue to deliver on this fundamental human right and make home ownership a reality for the majority of Kenyans

Steven Njoka, chairman Richland Development said that they projected developing phase two of the housing units and urged the government to reduce VAT rate on housing.

With an uptake rate of over 100 units sold in the first two months of the campaign, the demand is more than modest.

Next; <a style="color: #0000ff;" href="https://estatecloud.co.ke/whats-driving-demand-for-commercial-real-estate-globally/">What’s driving demand for commercial real estate globally?</a>

Construction on the Nakuru Airport after the closure of the bid submission process for the project.

Nakuru Governor Lee Kinyanjui said the Kenya Airports Authority will review the received bids to determine who is awarded the construction contract.

The long-awaited project will involve the conversion of the Lanet military airstrip into an international civilian airport with the aim of supporting horticulture and tourism in the Rift Valley hub.

Located near the Kenya Military Academy – about 10 km from Nakuru town, the airstrip will be upgraded in two phases in partnership with the county government.

With full funding from the Government of Kenya of Ksh. 27 billion, the first phase of the project consists of a 1.7 km runway, rehabilitation of the existing runway to bitumen standards, the erection of a fence, and the construction of taxiways.

In addition, it will involve the construction of a terminal building, a military lounge, construction of air rescue and firefighting building, a power substation and a patrol road as well as the construction of military and civilian gates.

The second phase of the project will extend the first phase enabling the airport to accommodate larger aircraft (approximately 40 to 100 tonnes) and may involve land acquisitions.

The latest developments are long overdue for the project, whose groundbreaking was <a style="color: #ff6600;" href="https://www.constructionkenya.com/2309/nakuru-airport-construction-plan/">scheduled for 2014</a>, located on 642 acres in the Pipeline area.

The county had proposed two other sites: Naivasha and Njoro which were rejected on the basis of poor terrain. The airport will be located about 15km from Nakuru town on the Nairobi-Nakuru highway.

Related; <a style="color: #ff6600;" href="https://estatecloud.co.ke/nakuru-gets-senate-approval-for-city-status/">Nakuru gets senate approval for City status</a>

Construction of Nakuru Airport Nears Start

Construction costs in Kenya might have become more expensive especially in Nairobi, but building cost in the East African capital is still one of the lowest on the continent, and even globally. Also, hourly wages in Africa’s construction industry are still by far the lowest globally. This is according to the latest publication of the International Construction Market Survey for 2018 by <a href="https://www.turnerandtownsend.com/en/locations/africa/kenya/" target="_blank" rel="noopener noreferrer">Turner &amp; Townsend</a>.

The annual report, covered 46 key markets across the globe, revealing insights about the nature of construction markets. The report states that labour shortages have become more frequent in global markets with this year recording shortages in 27 of the surveyed markets, up from 24 last year. In Africa, markets that experienced skilled labour shortage include Johannesburg, Kigali and Kampala.

Kenya

According to the data, Nairobi has the highest margins of the continent’s surveyed markets, at 8.5%, and with the lowest preliminary costs of 6%. A more nationwide analysis showed that prospects for Kenya’s construction industry look bright. International real estate investors are re-emerging, and local development firms are pushing forward with plans. As an extra, the oil sector, finally, seems set to blossom with exports already begun.

Meanwhile, the country’s emerging middle-income class is raising demand for better quality homes and the government which has promised a million homes, has begun work to deliver. For developers, challenges remain skills shortage, credit scarcity and low labor productivity.

Industrial

In Nairobi, the least costly category for construction was a basic warehouse or factory units which in 2018 cost $340 per square metre, an increase of $3 over the previous year. This is deceptively low as a large warehouse distribution centre or a high-tech factory would cost $485 and $971 per sqm respectively. The construction of car parks is also cost-friendly. A multi-story underground car park costs $437 per sqm while a multi-story above-ground car park would cost $408 per sqm.

Educational

For investors with interest in the education sector, the construction of primary and secondary education facilities cost $437 per sqm while building universities and colleges cost $485 per sqm. And for commercial property, the cost of constructing offices in a business park was $631 per sqm. Medium A-grade offices in the CBD with up to 20 floors cost $699 whereas for high-rise prestigious offices in the CBD, and investors would have to put in $922 per sqm.

Hospitality and Healthcare

Notably, hotels still cost more than hospitals to build. A 3-star traveler’s hotel costs $990 per sqm to build, a 5-star luxury hotel however costs much more at $1262 per sqm similar to a resort-style property costs $1262 per sqm. Comparatively, a daycare centre (including basic surgeries) costs $8256 per sqm and a regional hospital costs $1000 per sqm. A general hospital e.g. a teaching hospital costs $1214 per sqm. It remains to be seen whether the number of hospitals will exceed the number of hotels in the country.

Residential

Residential construction forms the bulk of the construction in the country. The cheapest to construct are aged care/affordable units which cost $437 per sqm. These are followed by individual detached or terrace style house of medium standard which cost $505 per sqm while individual detached houses of prestigious standards cost $777 per sqm. Medium standard townhouses cost $583 while low-rise apartments both cost $534 per sqm. High-rise apartments cost $631 per sqm.

Retail

In retail, a neighbourhood supermarket would cost $558 per sqm while a large shopping centre including a mall costs $655 as of 2018. A prestigious car showroom would cost $704 per sqm.

Airports

Airports are still the most expensive to build with a basic service low-cost carrier terminal costing $1942 per sqm while a full-service domestic terminal costs $2592 per sqm. According to the report, steel beams cost the most at $2039 per tonne followed by reinforcement beams at $1165 per tonne.

Labour

In 2018 labour costs ranged between $5 for the general labourers to $15 for the site foremen. The cost escalation is expected to be 3% during the 2018-2019 year compared to 1% the previous year. Overall, there was an increase in construction costs from the previous year.

Major infrastructure plans for the country include are a USD140m port at Kisumu and three airports at Lamu (USD188m), Isiolo (USD175m) and Lake Turkana (USD143m). The World Bank is funding a USD285m aviation modernization project to improve airport facilities

Further, Kenya’s urban population is expanding at an annual rate of 4.15 percent, generating demand for new cities. Already construction costs in major urban centres is quite high.

Related; <a style="color: #ff6600;" href="https://estatecloud.co.ke/kenya-construction-costs/">Kenya Construction Costs, 2017</a>

Estate Cloud

Estate Cloud

Nairobi Metropolitan Services Restores QR Approval In New Directive

By Estate Cloud - over 2 years ago - Kenya

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