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Nairobi Metropolitan Services (NMS) has set aside a budget of Ksh 150 million in the current financial year for the purchase new cemetery land for the city.

The move aims to relieve pressure from the 100-acre Lang&rsquo;ata cemetary which has been full for the past 20 years NMS said a request to the land directorate to begin the process of acquiring the land and a discussion with the Kenya Forest Service (KFS) had been initiated.

&ldquo;A base budget of Ksh 150 million has been budgeted for this financial year for the acquisition of the land,&rdquo; said the NMS.

The Directorate of Lands and the KFS are left to identify the specific land to be dedicated for the cemetary Mugumoini Ward in Lang&rsquo;ata Constituency.

The initiative will also include the purchase, installation and commissioning of a crematorium at Lang&rsquo;ata Cemetery. Nairobi has three crematoriums including Lang&rsquo;ata, Hindu and Kariokor.

An attempt by the county government in 2017 to swap 67 acres of forest land near the Langa&rsquo;ata cemetery for a graveyard flopped after KFS rejected the request. Another plan to purchase a 120-acre parcel of land for burial in Kitengela, Kajiado in the same year also failed.

The county government has been allocating funds for the exercise every financial year since 2017 but the efforts have been unfruitful due to difficulties in land acquisition for the purpose.&nbsp;

Africa’s real estate market shave experienced significant volatility over the past year as a result of changes in the regulatory environment, swings in commodity prices and growing political and economic tensions.

However, analysts from Standard Bank maintain that the continents market fundamentals remain in favour of opportunities for long-term investors drawing from the continuing demand-supply imbalances. As a matter of fact, investors have sustained interest in the markets with modest growth noted in some of the key markets.

“This growth points to an evolution in the continent’s real estate sector as well as to the urgent need for investors in this space to adapt their approach in line with this evolution and to seek out more economically sustainable ways to participate effectively in these markets,” said Niyi Adeleye, Head of Real Estate Finance for Africa Regions at Standard Bank.

Under the current circumstances, the recommendation is for investors to adopt strategies with a long-term outlook, incorporating insights for value delivery drawn from market research. Investors recognize that a ‘one-size-fits-all’ approach does not work in Africa and it is crucial that sufficient time and resources are put into understanding the vast and varied markets that call the continent home.

The prevailing sentiment is that the more traditional private equity funding model has begun to unravel, pushing investors to begin appreciating the merits of more long-term approach in structuring their portfolios.

“When the size of an economy does not allow for the scale that investors are looking for, this limits the depth and size of the investments that they are able to make in that economy,” said Mr Adeleye.

“We are however, now seeing a shift towards more diversified markets and the evolution of previously untapped asset classes, as well as the emergence of a new breed of investor class,” he adds.

The recent changes have led to a demand for new asset classes and innovative ways of dealing with traditional asset classes. A case to point out is the emergence of ‘property aggregators’ who acquire properties at reasonable discounts and repackage them to achieve their return objectives.

As a result, markets are evolving both in quality, variety and depth, triggering the start of a new cycle of development and acquisition, with increased sustainability built into the structure.

Kenya, Rwanda, Nigeria and other African countries are set to benefit from a $300 million investment platform coordinated by the International Finance Corporation and Chinese multinational construction and engineering company, CITIC Construction. The project is geared towards the development of affordable housing units in several African countries.

In partnership with local housing developers, the project aims to provide long-term capital to develop 30,000 homes over the next five years. Based on IFC estimates that each housing unit will create five jobs, the programme could create 150,000 jobs in the continent.

On top of the priority list is Kenya and Nigeria which each have housing deficits of 2 million units and 17 million units respectively due to rapid urbanization. The platform will start operations in Kenya, Rwanda and Nigeria before expanding into other countries.

According to IFC, African cities become home to over 40,000 new inhabitants every day, adding to the pressure on the already limited housing supply. IFC pledges to make a contribution towards affordable housing, building materials and employment creation in the property sector.

CITIC Construction is an established player with proven capabilities to deliver large-scale housing projects thus its role in Africa where there are few local developers with the technical and financial ability to construct large-scale projects. Still the IFC-CITIC Construction platform will work with local construction companies to oversee affordable housing projects each ranging in size from 2,000 to 8,000 units.

The firm has previously established it’s footprint in Africa after completing a housing programme for 200,000 units over four years in the new Angolan city of Kilamba Kiaxi. The Assistant President of CITIC Group and Chairwoman of CITIC Construction, Hong Bo, said that “CITIC Construction will take advantage of our engineering experience and delivery capability to develop more affordable houses for Africa through the platform with IFC.”

Oumar Seydi, IFC Director for Eastern and Southern Africa said, “As Sub-Saharan Africa become more urbanized, the private sector can help governments meet the critical need for housing. The platform will help transform Africa’s housing markets by providing high quality, affordable homes, creating jobs, and demonstrating the viability of the sector to local developers.”

IFC intends to work with financial institutions and housing finance to support the purchase of the housing u nits which will be constructed in compliance to IFC’s green building standards. Already, IFC has invested over $3billion in housing finance in over 46 countries globally.

African Countries to Benefit from IFC Housing Platform

Equity Holdings Venture Capital, an investment arm of Equity Group plans to build towers for the Kigali International Financial Centre (KIFC). 

Rwanda&rsquo;s cabinet approved the project which is seen as a strategic growth support initiative last week. The CEO of Rwanda Development Board (RDB) Clare Akamanzi said the Kigali Financial Towers will be a real estate project that will be located in town, Nyarugenge District. 

&ldquo;They will build one of the buildings for the Kigali International Financial Centre (KIFC), and the idea is for it to be a state-of-the-art real estate project with a hotel that can accommodate people working at the Centre,&rdquo; she told Rwanda&rsquo;s <a href="https://www.newtimes.co.rw/news/kenyas-banking-tycoon-mwangi-build-kigali-financial-towers">NewTimes</a>. 

The Rwandese government set up Kigali Finance Limited to oversee the development of the financial centre whose aim is to build an attractive ecosystem for big banks, fund managers, insurance firms, and other multinationals to set up shop in Rwanda. 

Akamanzi said Rwanda is keen on attracting big names like HSBC and Citibank hence the need to invest in big real estate projects like this. 

She said the country is eyeing the status of a regional financial centre so it can key into the global financial system through partnerships. The government is set to sign an agreement allowing for the development of the project, which is expected to be complete within three years from the signing date. 

An official from EH Venture Capital in Nairobi the project was still at an early stage adding that the design will be done by early 2021. Details of the project&rsquo;s size are still unknown. 

Nairobi Financial International Financial Centre 

Nairobi has long been in discussions to establish an international financial centre with moves dating back to 2015. 

The Nairobi International Financial Centre Act was gazetted in August 2017 to serve as a legal framework for the <a href="http://kenyalaw.org/kl/fileadmin/pdfdownloads/Acts/NairobiInternationalFinancialActNo25of2017.pdf" style="color: #ff6600;">establishment and regulation</a> of the centre. 

In November 2018, Kenya&#39;s National Treasury <a href="https://kenyanwallstreet.com/nairobi-international-financial-centre-takes-shape-as-government-opens-bids-for-key-consultants/">invited</a> bids for consultants to develop the framework for the establishment of Nairobi International Financial Centre, a regional financial hub. 

The project forms part of the country&#39;s Vision 2030 which envisages the NIFC as a catalyst for Kenya to gain a deeper foothold in sub-Saharan Africa&rsquo;s growing financial services segment. 

However, implementation has been slow.

Equity Holdings To Develop Kigali International Financial Centre Towers

Africa's real estate markets remain attractive despite volatility

Nairobi has been ranked one of the most dynamic cities in the world. According to the 2020 City Momentum index by international real estate firm JLL, Nairobi is ranked the 4th most dynamic city on the planet and top on the continent.

In 2019, the index ranked Nairobi sixth among the most dynamic cities.

Two Indian cities; Hyderabad and Bengaluru, and one Vietnam’s Ho Chi Minh were ranked the top three respectively. Nairobi also ranked third in the index’s list of top 10 cities for office net absorption in 2019.

Nairobi has made the Top 20 list in the index for each of the past six years, reflecting its position as one of Africa’s most dynamic city economies.

According to the report, Nairobi’s momentum is supported by favourable demographics (it is predicted to show the fastest growth in ‘engine room’ population of the 130 cities covered by the Index), infrastructure investment, technology, tourism and retail.

Engine room population refers to those aged between 20-40 years as a proportion of total population.

“Poor urban planning and unchecked construction have led to haphazard and uneven development in many of the Top 20 cities. Several are now looking to rebalance their spatial inequalities through ambitious plans to build new districts and create mechanisms to refocus development,” says the report.

The index is constructed using 18 variables that assess socio-economic momentum (50%) and commercial real estate momentum (50%).

Much of the real estate and infrastructure in high-growth emerging cities have yet to be built. This offers a significant opportunity for these cities to combine urban planning, place-making and digitalization to create new sustainable transport-oriented locations that are new engines of economic growth and community engagement.

Related; <a style="color: #ff6600;" href="https://estatecloud.co.ke/nairobi-ranked-6th-among-top-20-global-cities-with-momentum/">Nairobi ranked 6th among top 20 global cities with momentum</a>

Pan-African real estate financier Shelter Afrique, has signed a partnership with Habitat for Humanity’s Terwilliger Centre for Innovation in Shelter, to jointly avail funding for affordable housing projects in African countries.

The partnership was formalized in Nairobi by Shelter Afrique's CEO Andrew Chimphondah and Habitat for Humanity's Associate Director for Capital Markets and Financial Inclusion Elena Milanovska.

Funds will be targeting firms focused on provision of housing loans to the low – middle income population in Kenya and 43 other countries where Shelter Afrique operates.

The two institutions will seek to establish an incremental building fund for Africa, capacity building in housing micro-finance, and technical assistance through the partnership. Chimphondah said the partnership will enable them to promote more inclusive housing market systems with while making the affordable housing dream a reality across Africa.

"Our research on housing finance options for Africa has shown that the penetration of housing mortgage throughout Africa is quite low- meaning that the mortgage might not be the right option for low-middle income population."

"We want to give Kenyans and other people in our other 43 member states the opportunity to have a dignified living and we believe this fund will make it easy for such people to access financing to build decent houses in their own area," Chimphondah added.

Habitat for Humanity has established a $100 million micro-build fund that supplies debt capital and technical expertise to help micro-finance institutions increase the availability of housing loan products for their low-income customers.

Milanovska said that Habitat for Humanity International had invested more than $4 million in Africa from the micro-build fund, adding that the partnership with Shelter Afrique will make it easy for the organization to significantly increase its investment in Africa.

Related; <a style="color: #ff6600;" href="https://estatecloud.co.ke/3343-2/">Shelter Afrique to invest KSh. 200 million in KMRC</a>

Shelter Afrique and Habitat for Humanity in $100M affordable housing deal

Data on Nairobi's land prices for the first quarter of 2020 showing a marginal retreat for both suburbs and satellite towns over the quarter according to the latest and indices by HassConsult.

Land prices in the suburbs decreased by 0.9 percent over the quarter while in the satellite towns prices slightly dropped 0.21 percent. Some Nairobi suburbs have bucked the overall trend with Muthaiga registering a 2.38% increase in the 1st quarter and Spring Valley showing a 8.87% increase in the past year.

Similarly, in satellite towns, Kitengela continued to grow with a 2% increase in the first quarter and a 12.68% increase in the past 12 months.

With the global economy experiencing unprecedented fluctuations and declines, investors are displaying caution and delaying purchasing decisions in the absence of market stability.

In Nairobi, the quarterly drop was the biggest since the index was launched while for satellite towns the last drop was last seen in the third quarter of 2017.

“The Lands Registry has been temporarily closed as a COVID-19 preventive measure, effectively slowing down land transactions. This is in addition to the general slowdown in economic activity that the pandemic has caused which could potentially further see adverse activity in the sector,” said HassConsult Head of Research and Marketing at Hass Consult Sakina Hassanali.

Annually prices in Nairobi's suburbs marginally increased by 0.28 percent while for the satellite towns prices were up 6.51 percent.

Despite the challenges the COVID-19 pandemic is posing to the economy Ms. Hassanali said that should the pandemic be well managed and there is a gradual recovery in the economy, these efforts will be reflected in the real estate market.

“The COVID-19 pandemic has left some landowners are unexpectedly limited liquidity and as a result, we may see a bigger supply in land moving forward. However, this will create an opportunity for shrewd investors who have not been affected. It is important to note that land has traditionally outpaced other asset classes over the long-term, and we have no data that suggests this will change” said Ms. Hassanali.

In fact, Ksh. 1 Million invested at the end of 2007 would have been worth KSh. 9.09M if invested in land in Nairobi Satellite Towns, KSh. 6.35M if invested in land in Nairobi Suburbs and KSh. 2.41M if invested in property. The same Ksh. 1 Million would now be worth Ksh. 2.76M if invested in bonds and KSh. 1.40M if invested in savings and only Ksh. 0.37M if invested in Equities.

Read; <a style="color: #ff6600;" href="https://estatecloud.co.ke/real-estate-outlook-post-covid-19/">Latest Kenya real estate outlook</a>

Estate Cloud

Estate Cloud

NMS allocates KSh. 150Mn for New Cemetary

By Estate Cloud - over 2 years ago - Kenya

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