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Kenya | Real Estate and Housing Sector

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#1 · (Edited)
This thread is dedicated to the boom in property (Real Estate) construction and lease in Nairobi and Mombasa and the fears/promises that might arise in future.

Kenya’s new property kings
By DAVID OKWEMBAH Posted Saturday, March 14 2009 at 22:01
In Summary

Influx of questionable foreign cash distorts real estate market and threatens to push ordinary people out of the housing sector
Money from abroad and Somalia shakes real estate sector, especially in Nairobi
Money from Kenyans living abroad and war profiteering in the region has flooded into the Kenyan property market, leading to a doubling of prices for land and houses and steep increases in rents, real estate experts say.

They attribute this trend in part to demand by non-Kenyans, most of them from war-torn Somalia. The areas most affected are Nairobi, Mombasa and other major urban centres where the price of land has more than doubled as property is sold long before it is ready for occupation.

And the increase in prices has not only affected upmarket areas but low and middle-income residential neighbourhoods as well. Findings by the Sunday Nation follow investigations by international security agencies that have discovered that millions of dollars reaped from piracy along the Somali coast and drug trafficking are finding their way into Kenya and other parts of the world through an intricate money-laundering scheme masterminded by international criminal syndicates.

The money-laundering, which also involves proceeds from tax evasion, has focused the attention of international security agencies on Kenya, which is being seen as a regional hub for the illicit activities. Areas of Nairobi most affected by the rise in property prices include Karen where the cost of an acre of land has jumped from about Sh5 million three to five years ago to at least Sh15 million today.
At Kilimani, an acre of land now goes for a staggering Sh70 million, with property valuers and conveyancing lawyers warning that the situation could get out of hand unless checked.

At Parklands, an eighth of an acre sells for Sh50 million, while at nearby Eastleigh, a similar piece is going for between Sh20 million and Sh25 million. Rents have also skyrocketed. In congested Eastleigh a two-bedroom flat that went for Sh10,000 two years ago is renting for Sh25,000 a month today.

At Nairobi West, a three-bedroom house was renting for Sh25,000 two years ago; today the rent is between Sh30,000 and Sh38,000. Real estate experts and lawyers say that much of the money that has flooded into the market comes from Kenyans, including Kenyan Somalis, living outside the country.

And some comes from businesspeople who have fled conflict in Somalia, the Democratic Republic of Congo and Burundi. Many properties in upmarket Nairobi areas including Karen, Upper Hill, Kilimani, Lavington, Westlands and Parklands have changed hands at prices that in the recent past would have been considered outlandish.

Investigations by the Sunday Nation have established that the cost of 10 acres at Karen, which had been put on the market for at least Sh4.5 million an acre, was recently raised to Sh6.5 million when a Somali national made inquiries.

A Kenyan, who also asked not to be identified, was eyeing a property on Kirichwa Road in Kilimani, Nairobi. The bungalow on a quarter-acre of land had been advertised for Sh25 million. It was eventually sold for Sh35 million.


In Nairobi’s Upper Hill area, next to Hill Park Hotel, a prime property recently changed hands and has undergone thorough renovation. It was not possible to determine the cost; the building is now being leased as an office block. In the city centre, two prime plots, one on Loita Street and another next to the Uchumi supermarket near Koinange Street, are also said to have been bought by foreigners.

Timothy Njehia, managing director of Crystal Valuers, told the Sunday Nation that property in Nairobi has appreciated by more than 100 per cent in the past three years. “Remittances from the diaspora have spurred the market and pushed up prices of property by more than 100 per cent,” he said.

The skyline of Eastleigh, a former residential estate, has changed markedly in the past decade as multi-storeyed buildings replace single-level dwellings. “Somalis have pushed the prices of property to an all-time high in the past three years because price to them is not an issue,” James Katana of Green Leaves Properties, Mombasa, said.

He claimed that Somali nationals have taken control of major estates in Mombasa, like Nyali, Tudor, Old Town and Kizingo. “They are even demolishing most of the properties they are buying and building flats which they are converting into apartments and budget hotels.” He said most of the foreigners, mainly Somali nationals, buying properties in prime areas of Mombasa and Nairobi acquire them through proxies.

But a city lawyer involved in conveyancing, who spoke to the Sunday Nation on condition that he be not identified so as not to jeopardise some of his transactions, also attributed the rise in prices to remittances from Kenyans abroad and non-secured local bank loans. He said the increase in prices seen in areas like Eastleigh, Parklands, Kilimani, Nairobi West and Lang’ata was at least in part due to change of use determined by the city council from residential to commercial.

He said First and Second Avenues in Eastleigh have been converted from residential to commercial use, pushing up property prices on the two streets. He said the Somali and Asian communities in Kenya were well known for their entrepreneurship, especially in property conversion. But he did not say whether those buying were Kenyan nationals.

The lawyer said this was also true for Parklands, especially the road that runs from Forest Road cutting across to Highridge shopping centre. He said property prices along this road have more than doubled in the last five years as residential areas are converted to commercial use.

He said the same was true for properties on Ngong Road, Argwings Kodhek and Lenana Road, all in the Kilimani area. While the majority of properties in these areas were residential, they have now been converted into multi-family dwellings, and office and business premises.

Mr Njehia said that in areas like Kilimani, Kileleshwa and Lavington, the cost of building apartments has gone up. But he also suggested that the global credit crunch could soon hit the local property market. The valuer said the local market has started to experience stagnation since the beginning of the year when overseas Kenyans stopped remitting money.

“There is stagnation in the properties market, but the magnitude can’t be measured at the moment,” he said. A banker who cannot be named as he is not authorised to speak to the media, said banks had financed the cost of an estimated 500,000 houses since President Kibaki took over power in 2003.
But he cautioned that with rising inflation, many Kenyans who secured mortgages might start experiencing difficulties servicing their loans. He suggested that as many as half these houses might be repossessed because of inflation spurred by the global credit crisis.

International security agencies are also said to be concerned about the less-than-transparent acquisition of petrol stations and other businesses.
 
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#202 ·
Greenspan Housing Estate - Eastlands(Now complete)

Greenspan Housing Estate includes 270 maisonettes and 980 apartments.

Also part of the project is:

a modern and attractively open-planned Shopping and Leisure Park including a major supermarket, over 70 shops and offices, numerous restaurants and 3 cinema screens.
a nursery school (subject to approvals)
a fully equipped medical facility (provisional)
Phase 1 of the Housing Project is complete and selling rapidly, with the first buyers occupying from May 2010.

Phase 2 of the Maisonettes is due for completion in September and is now selling.

Security
The project will be protected by a tall boundary wall with electrical fencing and razor wiring. In addition, a private security company will be hired to provide numerous security guards giving a 24 hour service.

Eco-friendly
Greenspan considers the environment very seriously and the following considerations have been put into place

Solar-powered panels for each unit to provide water heating (currently for maisonettes)
A borehole on-site, which will lead to Greenspan Housing Estate being self reliant for water supplies
Rain water harvesting
Provisions for solar-powered street lights for the next phase
Lush greenery, with ample grass and trees planted.
A naturally ventilated design allowing for consistent air flow, reducing the need of fans and air-conditioners.
Some images of the project:http://greenspanhousing.com/investors-potential/maisonettes/
 
#203 ·
This beautiful project - Mall Costa Marina - , I don't c any such construction within Mombasa CBD! Or is it the disputed alocation of Uhuru Gardens to pvt developer? Can sm1 advice wheather the pjct is on course and where... want 2 c 4 myself.......

Otherwise it will facelift Mombasa town... long left 2 congrete jungles..... its real state of the art n I shd b the 1st to step in on opening......
 
#210 ·





Kengen RBS Gardens - Parklands (Nairobi Kenya)

The development was proposed on a 3 acre piece of prime land at Parklands off forest road. A decision to demolish existing structure and put up the proposal was reached based on the rate of returns. The development consists of 84 fully furnished apartments of double and single rooms on 5 and 6 floors. Other extras include: lift on every block, sauna and steam rooms, swimming pools, squash court, jogging track and more.
 
#217 · (Edited)
PROPOSED : SKY ROCK APARTMENTS

SKY ROCK APARTMENTS


Enjoy a Lavish Lifestyle shaped out of your dreams about your perfect Home with amenities that would leave you fascinated. Like all our other projects, we believe in the philosophy of a perfect home.

Since inception, KDL has moved from strength to strength adding more distinctive features and services to their projects for clients with diverse needs. KDL is truly Kenya’s first property Developers that has studied international practices and adopted them to benefit the Kenyan populace.

We therefore share your dream which has inspired us to design 32 spacious & luxurious apartments situated on Argwings Kodhek Road - Nairobi where your dreams get defined and take shape of your home that reflects your class
It does not end here… To add to the joy of the fascinating surrounding infrastructure, we emphasize on quality of life; giving residents options of multiple lifestyle of luxury, recreation and entertainment. With cutting edge technology, the introduction of Digital Home Solutions will make your Everyday Easy with simple, practical control of your music, movies, lights, security system and a lot more to discover from anywhere in your home. Remain connected with your home at all times via internet and mobile from anywhere in the world and make your home your favorite place to be by bringing a new level of effortless entertainment, peace of mind, luxurious comfort and convenience to you and your family.

Sky rock apartments are meticulously planned and exquisitely designed to be an architectural masterpiece with facilities and amenities at par with international standards. Embellished with care, we have plans that once you step inside your home at Sky rock Apartments, you would surely discover - the true joy of living - today, tomorrow and forever

Enjoy a Lavish Lifestyle shaped out of your dreams about your perfect Home with amenities that would leave you fascinated. Like all our other projects, we believe in the philosophy of a perfect home.

Since inception, KDL has moved from strength to strength adding more distinctive features and services to their projects for clients with diverse needs. KDL is truly Kenya’s first property Developers that has studied international practices and adopted them to benefit the Kenyan populace.

We therefore share your dream which has inspired us to design 32 spacious & luxurious apartments situated on Argwings Kodhek Road - Nairobi where your dreams get defined and take shape of your home that reflects your class
It does not end here… To add to the joy of the fascinating surrounding infrastructure, we emphasize on quality of life; giving residents options of multiple lifestyle of luxury, recreation and entertainment.

With cutting edge technology, the introduction of Digital Home Solutions will make your Everyday Easy with simple, practical control of your music, movies, lights, security system and a lot more to discover from anywhere in your home. Remain connected with your home at all times via internet and mobile from anywhere in the world and make your home your favorite place to be by bringing a new level of effortless entertainment, peace of mind, luxurious comfort and convenience to you and your family.

Sky rock apartments are meticulously planned and exquisitely designed to be an architectural masterpiece with facilities and amenities at par with international standards. Embellished with care, we have plans that once you step inside your home at Sky rock Apartments, you would surely discover - the true joy of living - today, tomorrow and forever

Source:
The Project Underconstruction.

 
#221 ·
Some of these are just 'kawa' projects with not much hedging to warrant own thread, but its a thin line - guess the mindset of the poster makes the final decision. But if there is enough grounds to discuss it then why not.
 
#222 ·
Nyali gets a new face as apartments replace homes in property boom

Some of the new apartments coming up in Nyali, Mombasa, which are replacing the old buildings to accommodate the rising population. The Municipal Council of Mombasa is yet to put in place supportive infrastructure to support the growth of Nyali. Laban Walloga


Alice Wahome knows the taste of putting up apartments in Nyali Estate in Mombasa. Through her company, Shikara Limited- Apartments and Villas- she has put up more than 60 apartments in different areas of Nyali in the past five years and by the end of this year, the company will have more than 80 apartments when two units she is putting up are complete.


However, the sudden rush by property developers to acquire land in the region to put up new apartments- the most lucrative property frontier in the region now- is raising grave concerns to her and other keen property developers who say that the initiative will back fire due to unplanned and uncontrolled development that has taken place in the past few years.


The Municipality of Mombasa has not kept up with the pace in updating supportive infrastructure — sewage and water management — to cater for a population that conservative estimate say has increased 100 fold in the past five years. Mombasa town clerk Tubman Otieno, in an earlier interview, told the Business Daily that the previous zoning of Nyali estate, where building highrise structures was not allowed cannot hold anymore due to a growing need to housing in Mombasa.
continue reading...
 
#224 ·
Foreigners race for rail firm’s Sh256bn real estate project

Four international financiers have applied to invest jointly with the Kenya Railways Corporation (KRC) in a Sh256 billion real estate plan as foreign investors eye the country’s booming property market.

The State-owned rail agency has been scouting for investors to help develop office blocks, hotels, light manufacturing industries, parking bays and shopping malls on its 320 acres of idle land surrounding the rail stations in Nairobi, Kisumu and Mombasa.

“We are looking at the four applicants and we shall reveal their details at the appropriate time. All that is im
Four international financiers have applied to invest jointly with the Kenya Railways Corporation (KRC) in a Sh256 billion real estate plan as foreign investors eye the country’s booming property market.

The State-owned rail agency has been scouting for investors to help develop office blocks, hotels, light manufacturing industries, parking bays and shopping malls on its 320 acres of idle land surrounding the rail stations in Nairobi, Kisumu and Mombasa.

“We are looking at the four applicants and we shall reveal their details at the appropriate time. All that is important now is that they have very strong offers,” said Mr Nduva Muli, the firm’s managing director in an interview with the Business Daily without giving details.

Under the joint venture, Kenya Railways will provide the land which is shaping up to be the biggest costs item in housing construction and part financing, expected to earn the firm an estimated Sh1 billion annually in land leases, critical to support its heavy financial needs.

“We are investing in such projects so that we stop our over reliance on the government. KR will use the proceeds from the land lease to develop the railway infrastructure and the terminus.” said Mr Muli.

This comes at a time of property boom in the country that has seen home and office block prices rise 3.5 times in the past decade — a return that has caught the eye of foreign investors.

portant now is that they have very strong offers,” said Mr Nduva Muli, the firm’s managing director in an interview with the Business Daily without giving details.

Under the joint venture, Kenya Railways will provide the land which is shaping up to be the biggest costs item in housing construction and part financing, expected to earn the firm an estimated Sh1 billion annually in land leases, critical to support its heavy financial needs.

“We are investing in such projects so that we stop our over reliance on the government. KR will use the proceeds from the land lease to develop the railway infrastructure and the terminus.” said Mr Muli.

This comes at a time of property boom in the country that has seen home and office block prices rise 3.5 times in the past decade — a return that has caught the eye of foreign investors.
Rapid urbanisation, population growth and expansion of the middle class have emerged as drivers of Kenya’s property market that is riding on nearly three decades of underinvestment.

Kenya Railways has opened its massive land to private investors, joining the list of institutions such as the National Social Security Fund (NSSF), Centum Investment and pension schemes in rushing to tap the huge returns from the booming property market.

In Nairobi, under KRC the investor is expected to put about Sh120 billion in building shopping malls, restaurants, a manufacturing park, and two hotels with a capacity to accommodate 3,000 people.

In Mombasa, the investors will build an international trade centre, office blocks, shopping malls, and three hotels with conference facilities able to accommodate 3,000 people at a cost of Sh80 billion.

The investors will build Sh60 billion car parking complex, shopping malls, restaurants, and two hotels able to accommodate 2,000 people in Kisumu.

The projects will create a fresh income stream for the cash strapped rail firm as well as dramatically transform Kenya’s real estate landscape, especially that of Nairobi, Mombasa and Kisumu
http://www.businessdailyafrica.com/...oject/-/539550/1205432/-/mrffqqz/-/index.html

 
#225 · (Edited)
#226 ·
City Hall opens Nairobi’s leafy suburbs for high-rise buildings


Nyayo Estate Embakasi in Nairobi. City Hall is reviewing existing building restrictions in parts of Nairobi, paving the way for construction of high-density settlements that could reduce the value of property in upmarket estates. Photo/FILE
BusinessDailyAfrica

City Hall is reviewing existing building restrictions in parts of Nairobi, paving the way for construction of high-density settlements that could reduce the value of property in upmarket estates.

The new by-laws, to be published in October, will open up exclusive neighbourhoods to developers of highrise flats in a drive to ease the cost homes that have nearly doubled in the past six years – buoyed by high land prices.

Real estate agents say high density settlements, such as those that City Hall is opening the leafy suburbs to, enable developers to distribute the land costs over more units, ultimately pulling down prices.

City suburbs

Review of the restrictions targeting inner city suburbs including Kileleshwa, Kilimani and Westlands that are classified as zones three and four, is expected to significantly dilute the value of property in these locations with the rise in number of homes.

Mr Patrick Odongo, the director of planning at the Nairobi City Council said easing development restrictions should bring down land prices and encourage new investments in the real estate sector.


City Hall is working on raising the plot ration restriction to 200 per cent from the current 75 per cent in these estates to encourage investments that have been stifled by high cost of land,” Mr Odongo told investors.

Plot ratio is a measure that compares the total built floor space with the size of the land on which the property sits. Authorities use the measure to determine developments in different locations demarcated as zones.
Mr Odongo said building regulations in the affected suburbs will shift from plot ratio as a tool to alternative instruments that include establishing minimum finishing requirements to preserve the value of established settlements.

We plan to introduce new instruments to regulate developments in these areas but we certainly need a vertical city that makes better use of the limited serviced land available,” he said.

City Hall said a consortium of professionals is working on the building regulation reviews and the final submissions are expected next month, before their enactment in October.

That means residents of the designated estates could start seeing highrise residential buildings of up to 10 floors in their neighbourhoods that are currently synonymous with massionettes and manicured hedges beginning next year.

The new measures will also encourage developers to invest in own solid waste management, water collection and recycling, and tapping of solar energy by awarding development credits to built up areas that are self reliant.

Developers with capability to fully manage their waste disposal could be allowed to build additional two floors.

A high rate of urbanisation coupled with rapid growth in income levels has increased demand for homes in the top-end of the housing market, piling pressure on land and driving up selling and rental prices.

Average property prices in Nairobi and outlying areas have risen more than three and half times in the past 10 years according to a recent housing survey by asset management firm Stanbic Investments.

It is, however, the infiltration of low-rise apartments and commercial buildings that have swayed land prices the most, rising over ten-fold since 2000, with recent deals on an acre clocking Sh150 million and above.
More recently, restrictions on the number of floors allowed in certain areas of the city have made the development of residential property less economically viable because of the high cost of land.

The last zoning review carried out in 2004 allowed developers a maximum of four floors for apartments in Westlands, Parklands, Woodley, Kilimani and Kileleshwa — a move that has visibly changed the leafy look of the suburbs.

Daniel Ojijo, the chairman of Mentor Holdings, a property development firm with an interest in the top-end of market, says the present guidelines have limited to four the maximum number of town-houses on a half an acre plot in Kileleshwa which costs about Sh60 million.

This means that before accounting for any other construction costs and developer’s margins, the cost of land for each unit is Sh15 million. The new regulations could slash that by at least half.

“We have been asking the council for these reviews to contain property prices,” said Mr Ojijo.

He said the scarcity of serviced land, including water and sewerage system, has forced developers to focus on the few estates that have the installed infrastructure pushing land prices beyond the reach of many.


Mr Odongo said volatility in the cost of land has been the result of government’s failure to lead in the supply of land for new development rather than leaving it to the private sector.


Developers say land constitutes the biggest expense, taking up more than half of the total input costs in the up-market estates while it should ideally account for less than 15 per cent.

Joe Mungai, the managing director of Tamarind Properties termed the development as monumental since it would allow developers to reduce the eventual property prices to enhance the possibility of faster selling.

Developers have to recoup their costs, forcing them to price the houses at a level that covers input costs and make a margin,” said Mr Mungai.
Higher selling prices means that the houses have to stay longer on the listings” he added.

Projects financers are weary that the high land prices amidst restricted development has placed their funds at risk as developers’ ability to service loans becomes a reality because they have lately been exposed to holding dead and expensive stocks.

Mr Joram Kiarie, the director of Mortgages at the Kenya Commercial Bank, says the lender is now concerned about providing construction loans to developers building to sell citing that such credit lines now posed real of default.

“Investors need to look out for the kind of developments they can put up, just to be sure they do not invest too much on land and then they are not able to make any return.”

Emma Miloyo, an architect and the chief executive at Design Source says that the proposals would simply double the built space and residents, and a consequence strain the available infrastructure.

Doubling the plot ratio means a strain of infrastructure, leading to heavier traffic in the area which has a potential to lower the overall value of individual properties in the zones,” said Ms Miloyo.

Construction costs

Economists expect that the move would allow developers to have a bigger built-up area, thereby slashing the overall construction costs borne by developers since the expense will be spread over a bigger number of units.

Barth Ragallo, a land economist and managing director at Tysons, a real estate consultancy firm, says raising the plot ratio meant increased supply of serviced land to developers but pointed out that home prices would only be determined by market forces.

“The move means increased access to serviced land because developers can gain higher utility but the eventual home prices would be a factor of demand and supply,” said Mr Ragallo.

While the proposed reviews are expected to win wide approval from developers, it is yet to be seen how neighbourhood associations in these areas would react since allowing for high density developments would rob their suburbs of exclusivity that has ensured they only attracted the rich.
 
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