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Real Estate Developers have expressed sentiments collected in the recently published Global Development Report by Knight Frank.

The report features responses from 160 global developers from 22 locations including Kenya, Tanzania and South Africa, revealing the pandemic&rsquo;s impact on near-term housing supply and long-term design trends.

The survey revealed that real estate developers are mainly concerned about constraints to delivery, focus on technology, domestic demand and cities We have hand-picked a few key snippets from the report for perspective to our audience:

<ul>
	<li>The biggest concern when thinking about future developments remains to be funding according to 30% of the respondents, this is followed by property market regulation/taxation (22%).</li>
	<li>Almost six in ten real estate developers globally have delayed projects in response to the spread of Covid-19, as the virus wreaked havoc on supply chains and prompted a wholesale rethink of how and where people want to live.</li>
	<li>Of those developers with delayed projects, more than four in ten are now making changes to designs that were once considered complete.</li>
	<li>63% of developers revealed that their sales will be more geared towards virtual offerings such as 3D images, virtual viewings and walkthroughs.</li>
	<li>Following a period of unprecedented restrictions on movement, 43% said developments will be more sensitive to the requirements of domestic buyers while 50% said they will retain their current status.</li>
	<li>45% of surveyed real estate developers will be looking to develop more in cities while 41% prefer a mixture.</li>
	<li>77% of developers revealed they will be considering the use of advanced technology (telecommunications, internet connectivity and touch-free) in future developments.</li>
	<li>76% said they will be considering including space for home office in future developments while 54% are considering more outdoor space.</li>
	<li>A third of global developers are considering adjusting the mix of residential and commercial elements in schemes.</li>
</ul>

Nairobi, Kenya – Africa’s prime real estate markets have posted mixed performances over the last two years, as divergence emerges between growth rates of commodity-exporting and commodity-importing economies in the continent, according to the Knight Frank Africa Report 2017.

The Africa Report – which was launched today at the East Africa Property Investment Summit (EAPI Summit) – showed that the majority of the 35 cities in 30 countries analysed have recorded declines in prime rents across offices, retail, industrial and residential segments since 2015, with Luanda in Angola hit the most, while some cities such as South Africa’s Cape Town posted no change, indicating stability.

Nonetheless, a significant number of the cities featured in the report recorded prime rental growths over the two years, ranging from 5.5% to 37.5% for Grade A offices, 3.8% to 108% for retail space, 10% to 87.5% for industrial space and 3.6% to 66.7% for prime residential properties. (For standardised comparisons, the Africa Report tracks rents for 4-bedroom executive houses in prime locations in each city covered) 

“Real estate demand stemming from oil companies and the associated services sector has eased in all the African oil-driven markets. Conversely, in the retail sector, the demand across Africa, from the growing middle classes has continued to create a marked increase in activity particularly in the Francophone countries. This increase in tenant demand has encouraged new development schemes to be proposed, with Abidjan (Côte d’Ivoire) providing a really good example of such cities where the planned schemes are supported by offshore investors.

"With the increasing demand for the best commercial and residential accommodation coming from the growing Africa middle classes, there has been an increasing need for developers to raise the quality of the specification in all the new developments.” said Peter Welborn, Chairman of Knight Frank Africa.

According to data in the Africa Report 2017, Angola’s Luanda remains the most expensive prime office location across Africa despite a significant correction over the past two years. Office rents in the city stand at US$80 per square metre per month, nearly halving from US$150/sqm/month in 2015. Nigeria’s Lagos and N’Djamena in Chad have the next highest prime office rents at US$67/sqm/month and US$55/sqm/month respectively.

In prime retail space, Tunis (Tunisia) posted the strongest growth in rents over the past two years, increasing by 108% to US$26/sqm/month from US$12.5/sqm/month in 2015. Douala (Cameroon) follows with a 66% growth to US$46.5/sqm/month in 2017. Retail rents fell the highest in Antananarivo (Madagascar) since 2015, declining by 57% to US$15/sqm/month, followed by a 50% drop to US$60/sqm/month in Luanda and 46.7% decrease in Dar es Salaam (Tanzania) at US$16/sqm/month.

DRC’s Kinshasa posted the strongest growth in prime industrial rents over the two years, up 87.5% to US$15/sqm/month, while Luanda’s fell by 52.4% to US$10/sqm/month over the same period.

Malawi’s Blantyre had the highest growth in prime residential rents across Africa, rising by 66.7% to US$2,500 for a 4-bedroom executive house in a prime location, from US$1,500 two years earlier. Tunis in Tunisia and Harare in Zimbabwe recorded the second highest growth at 33.3% each to US$4,000 and US$2,000 per month respectively.

Nairobi’s best performance was noted in prime industrial space, where rents rose by 11.9% over the last two years to US$4.7/sqm/month, while prime retail rents remained unchanged over the period at US$48/sqm/month. However, the city saw prime office rents fall by a fifth since 2015 to US$16/sqm/month, as rent for a 4-bedroom executive house decreased by 13% to US$4,100/sqm/month over the two years.

“A lot of Grade A office space has come into the market over the last two years and we have seen a significant number of established companies taking advantage of this to trade up space. Industrial rents have risen as a result of a move by developers into the high-end logistics market, whilst the development of a large amount of retail space has meant a stagnation of rents in this sector. Similarly, an over-supply of high-end residential property has led to a slight price correction,” said Ben Woodhams, Managing Director of Knight Frank Kenya.

According to the Africa Report, a growing volume of capital is targeted at Sub-Saharan Africa real estate investment and development, with a series of new investment vehicles being launched in recent years. South African funds are increasingly prominent as they seek to diversify from their domestic market, although a good deal of this interest has been diverted to opportunities in Eastern Europe.

The International Monetary Fund forecast strong 2016 economic growth in countries such as Tanzania (7.2%), Ethiopia (6.5%), Kenya (6%), Rwanda (6%), Senegal (6.6%) and Côte d’Ivoire (8%) – which are all well above the moderate 1.5% forecast for Sub-Saharan Africa. Knight Frank sees potential capital flow into all of these markets, although Rwanda may be limited by its relatively small size and Ethiopia by restrictions on international investment into some sectors.

In addition, rural-to-urban migration is intensifying growth rates in the major cities, with Kampala, Lusaka and Nairobi all growing at more than 4% per annum. The growth of Africa’s cities, combined with economic improvements, is expected to create demand for both better quality and greater volumes of commercial and residential real estate over the long term. Indeed, Nairobi already stands out as a shopping centre development hotspot.

“The challenge for both property developers and investors is to ensure that the impact and timing of planned infrastructure projects on the growth of their capital city is fully understood. Timing and the use mix are a key component to ensure real success,” Welborn said.

A study conducted by the IFC and the World Bank in 2019 focusing on how the private sector can contribute to affordable housing shows that Kenya’s accumulated housing shortage is worth about Ksh. 400 billion in value.

The data also shows the accumulated value of affordable housing shortage in other Sub-Saharan countries. Nigeria has accumulated the largest housing shortage of about $34 billion in value while Tanzania and Ivory Coast have a shortage of $6 billion and $9 billion respectively.

In total, the shortage in eleven of the top Sub-Saharan African countries accounts for approximately 3.4 million units, representing a potential formal market of over $60 billion.

Data from the report also shows that green building has a potential market size of $19 billion in Africa and a market opportunity of $1.7 billion currently.

The study shows that many emerging markets have created unrivaled opportunities under present conditions. The affordable housing sector provides opportunities for households, the construction industry, financial sector and the economy.

The opportunity requires a mix of investment and advisory services to achieve sustainable operations and increase affordability.

Read; <a style="color: #ff6600;" href="https://estatecloud.co.ke/africa-day-2020-to-highlight-african-cities/">Africa Day 2020 to highlight African cities</a>

&nbsp;

Housing shortage provides Ksh. 400 billion opportunity

Multi-speed growth across Africa signals opportunities

Pan-African private equity investor, Actis has announced that it is establishing a US$250 million data centre platform. The buy and build platform will comprise of independently owned, carrier-neutral, data centres across key African markets.

Actis has completed the first of these investments by taking a controlling stake in Nigeria’s leading, independent co-location business, Rack Centre. Rack Centre owns and operates a certified Tier III data centre in Lagos.

The investment into Rack Centre will fund a rapid expansion of the data centre, doubling the existing modular capacity and developing a traditional-build scale data centre on the same premises. This will create the largest data centre outside South Africa with hosting capacity in excess of 10MW over the near term.

Nigeria is Africa’s largest data centre market outside South Africa and provides a launchpad for the platform’s further expansion.

<a style="color: #ff6600;" href="https://www.act.is/media-centre/press-releases/actis-to-create-a-250-million-african-data-centre-platform/">Actis</a> is already one of the largest real estate and power generation investors in Africa. The firm has also created a Chinese data centre platform, Chayora Holdings, to develop hyper-scale data centre facilities in Tianjin and is exploring other Asian markets.

“We have been tracking the data centre market in Africa closely, building relationships with key operators and customers. Africa is at an inflection point and we expect to see an explosion in growth of demand for hosting capacity in independently owned data centres across the continent,” said David Morley, Head of Real Estate at Actis.

“We are excited about this new partnership with Rack Centre and its promoter Jagal Investments. Together they have built a strong business of international repute, hosting a compelling mix of customers ranging from leading Nigerian corporates to global cloud majors,” he added.

Actis is the largest private equity group in Africa having committed US$4.5bn to the region over the last 15 years.

Related; <a style="color: #ff6600;" href="https://estatecloud.co.ke/data-protection-law-to-create-opportunities-for-tech-based-real-estate/">Data protection law to create opportunities for tech-based real estate</a>

See Also; <a style="color: #ff6600;" href="https://estatecloud.co.ke/data-protection-law-to-create-opportunities-for-tech-based-real-estate/">Data protection law to create opportunities for tech-based real estate</a>

Read; <a style="color: #ff6600;" href="https://estatecloud.co.ke/investor-flight-sees-stanlib-aum-cut-by-half/">Investor flight sees Stanlib AUM cut by half</a>

The ministry of lands’ digitization initiative has received a shot in the arm following the coronavirus pandemic. The ministry which has in the past months been faced opposition from resistant stakeholders has now found an advantage allowing it to proceed with the digitization efforts.

The government is now set to embrace greater digitization in the property markets after the reduction in physical operations.

Lands and Physical Planning Cabinet Secretary Faridah Karoney said digitization of property registration was one of the government’s reform agenda.

“Be it land or buildings we have to go online not for the sake of it, but for the common benefit of the sector. Simplicity in accessing the digitized sector should be the hallmark of the process,” she said.

The ministry already has a blueprint <a href="https://estatecloud.co.ke/ministry-regulations-to-guide-electronic-land-transactions/">document</a> of how the system should work, part of it requiring that admission of authorized users with verifiable administration passwords who will have ability to create, edit and delete file data.

Ms Karoney said the new system would enable real estate agents and dealers to transact online and interact with government agencies online including the authentication and registration of deals.

She said that using the new system, the government can issue occupier certificates, title deeds and other transaction documents online, which would also result in time and money savings for property stakeholders.

The CS said the system would eliminate the need for agents and brokers to carry our physical visits on the ground and to waste time on long queues in offices, adding that all property deals except surveying services can be done online.

“It is only that the stakeholders in this drive have not been enthusiastic, committed and willing to deal with this issue in favour of full digitization,” she said.

The ministry is working with the National Treasury to develop and implement the digital service delivery system since COVID-19 has proved the need to embrace technology.

“The government is keen on abolishing manual procedures for services that can be obtained online,” she said.

Lands Principal Secretary Nicholas Muraguri the country should have moved into the digital sphere of service provision 10 years ago but there has been opposition from certain quarters to keep the old system.

He also affirmed that all property transactions can be transacted exclusively on a digital platform from authenticating ownership to titling and remittance of rates. The e-transaction regulations were mooted in 2006.

Mr. Muraguri also said that moving the transactions online had the potential to further cut the time taken to effect property transfers from the current period of over 49 days.

Read; <a style="color: #ff6600;" href="https://estatecloud.co.ke/ministry-of-lands-announces-temporary-closure-of-offices/">Ministry of Lands Announces Temporary Closure of Offices</a>

Ministry of lands to move all property transactions online

By FRANCIS MULI 

Land buying follows the basic principles of law of contract. The seller is supposed to disclose any defects on the title, e.g. if it’s being used as a security against a bank loan. Land buying requires that all legal and contractual procedures are followed to avoid future conflicts, which may lead to double loss. Before investing your money on any piece of land, follow the following steps:
<ul>
 	<li>Search at Ministry of Lands</li>
</ul>
Search with Ministry of Lands at district or county headquarters to ascertain the true land owners and establish the presence of brokers and if the title has been charged or has a caveat, for instance, when it has been used to secure a loan, or there is a court order barring any transaction on the land.

A search costs Ksh520 and should be ready within two hours. A valid search should be no more than six months old.
<ul>
 	<li>Land rates</li>
</ul>
Visit the Local Council (municipal or county) to confirm any unpaid land rates which you will need to factor in when deciding the purchase price. Cost varies from county to county. In Nairobi, you will be required to have a certificate of clearance from the Nairobi City County, which costs Ksh7,500 and should be ready normally within two hours.

If there are prevailing unpaid land rates you would need to agree with the seller on who will settle them as the land cannot be sold (transferred) with outstanding land rates.
<ul>
 	<li>Land Map</li>
</ul>
Visit the local surveyor and purchase maps of the place, normally two, one drawn to scale (informally known as tracing or mutation) and another showing the neighbouring farms, costing Ksh300 per map. You can buy these at the Lands Ministry but a surveyor is better and faster.
<ul>
 	<li>Ground Verification</li>
</ul>
Armed with the map, the surveyor and the seller visit the land on the ground. Have a tape measure to confirm the dimension from the map drawn to scale. Make sure you see the beacons or replace the lost ones. Surveyors charge about Ksh1,000 per beacon. Make sure the bordering neighbours are in agreement with the boundaries.
<ul>
 	<li>Agreement</li>
</ul>
The law requires any land transaction to be in writing. It is very advisable to have a lawyer (though not a must). According to the tariff provided by Law Society of Kenya the lawyer should charge Ksh3000 if land cost is Ksh1,000,000 and below and Ksh8,000 if land value is above Ksh1,000,000. Lawyer’s cost is normally shared equally between buyer and seller.

Ensure that the spouse to the seller is present at this stage or at least the spouse is aware and agrees with the transaction to avoid later complications.
<ul>
 	<li>Post Agreement Transaction</li>
</ul>
According to the agreement, you may pay in cash or installment. Ensure by the time you make the initial payment the title deed and other legal documents are in the custody of the lawyers. This is because the seller still owns the piece of land and may involve other transactions using the title deed, which may harm you financially.
<ul>
 	<li>Land Control Board</li>
</ul>
Book the Land Control Board (LCB) meeting. The LCB is a forum made of the Assistant County Commissioners (Previously called DOs) and the local village elders which meets once a month. They are the ones who give the final consent for the land to be sold. Their role is to protect the seller from self-destruction e.g. where a man is selling land without wife’s knowledge and they don’t have anywhere else to go or the land being sold is clan/community land. LCB costs Ksh1000.

However, there is a special Land Control Bond (SCLB), which involves only the Assistant County Commissioner and the two transacting parties instead of waiting for the main LCB that meets once per month. SCLB costs Ksh5,000 and may take two hours depending with availability of the Assistant County Commissioner.
<ul>
 	<li>Land Transfer</li>
</ul>
After all payments, the seller signs Land Transfer Forms which together with Consent from LCB, land search, clearance from county/ municipal council, passport photos, KRA PIN, agreement and old title deed are taken to the Ministry of Lands to change ownership. It costs Ksh5,000 to process new title which should be ready within two weeks.
<ul>
 	<li>Stamp Duty and Transfer Fees</li>
</ul>
You will need to pay stamp duty based on the value of land, i.e four per cent for municipalities and two percent for reserve.
<ul>
 	<li>Post Purchase Activity</li>
</ul>
After one week, the buyer should do another search with the Ministry of Lands to confirm that the land now reads his/her details.

That's how to go about buying land in Kenya.

READ; <a title="Rentals Still Reign, Hass Property Index" href="https://estatecloud.co.ke/rentals-still-reign-hass-property-index/" rel="bookmark">Rentals Still Reign, Hass Property Index</a>

Source; <a href="https://businesstoday.co.ke" target="_blank" rel="noopener noreferrer">Business Today </a>

Estate Cloud

Estate Cloud

What Real Estate Developers All Over the Globe Are Saying

By Estate Cloud - over 2 years ago - Global

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