2018 Construction Industry in Kenya Review. What to expect in 2019.

2018 Construction Industry in Kenya Review. What to expect in 2019.

The Kenyan real estate and construction industry in 2018 was characterized by the completion of iconic high rise developments around the city such as Prism towers .

First Community Bank Mehrab towers also contributed to the new Nairobi skyline from the architecture that was previously the norm, rectangular building blocks.

These new architectural shapes will inspire more Kenyan architects to venture away from the rectilinear box like designs that have characterized the Nairobi skyline.

The number of high rise buildings in architectural concept stage has significantly reduced.

Government enforcement of compliance.

In 2018, several buildings were demolished by the Government agencies for non compliance.

National Environment Management Agency demolished South End mall along Langata road due to its encroachment of riparian land.

Taj Mall building, near JKIA airport , was also demolished.

A multisectrorial committee in Government found the building to be sitting on a road reserve hence demolition orders were issued.

Ukay Mall in Westlands area of Nairobi was also demolished by NEMA for sitting on riparian land. https://nairobinews.nation.co.ke/news/ukay-mall-westlands-demolished/

These demolitions will shape 2019 construction and real estate sector as more and more developers will follow the right laid down procedures of having their buildings approved to prevent such situations. The Government agencies responsible for this enforcement such as NEMA and County Government planning departments will now be taken more seriously by developers so as to avoid being caught up at the wrong end of the law.

Cement companies such as Bamburi cement realised a 25% loss in 2018. https://www.kahawatungu.com/2018/12/03/bamburi-cement-issues-profit-warning-2018-earnings-to-slump-by-25pc/

East Africa Portland Cement, Athi River minince cement and other large cement manufacturers in Kenya posted losses in 2018 . https://www.constructionkenya.com/5341/kenya-cement-firms-revenues/

This means that there was low demand for cement hence fewer new buildings constructed in 2018.

With the decline in construction material consumption, this means less houses will have been constructed in 2018. The demand for housing in 2019 will be higher but affordability will be the issue.

Real estate sector contributed to the highest bank loan defaulters in 2018. https://www.businessdailyafrica.com/news/Real-estate-developers-biggest-loan-defaulters/539546-4878198-w51mp6/index.html

Housing Finance Bank also posted losses for 2018. https://kenyanwallstreet.com/hfc-group-issues-a-profit-warning/

Inflation rate in Kenya has been on the increase for 2018. We hope that 2019 will have a reduced inflation rate.

Lets hope for a better 2019. Happy new year to you all.

Architect Francis Gichuhi Kamau.

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info@a4architect.com