Construction and Real Estate industry in Kenya, 2020 January review

Construction and Real Estate industry in Kenya, 2020 January review.

In the month of January 2020, there has been a marked increase in construction of apartments and individually owned residential houses . This is due to the recent removal of interest rate caping, hence more people are now able to access bank financing for their projects.

Political leadership.

Previously, there was a marked increase in skyscraper type of buildings around Nairobi city, upper hill, westlands and Kilimani area. These mega structure type of buildings have since reduced after several Government monetary policy interventions were done , resulting in lower flow of huge billions into the country.

Amnesty.

From 2002 to 2012, during the Kibaki Presidency, the government was able to play around with monetary policies, thereby attracting lots of foreign funds into Kenya’s real estate such as CATIC,China National Aero-Technology Import & Export Corporation, European Pension funds etc.

Also, amnesty for Kenyans to repatriate funds stored offshore helped to fuel the mega construction projects around the country.

https://africanarguments.org/2009/09/18/kenyas-economic-crimes-can-a-conditional-amnesty-be-meaningful/

Current situation.

Lots of buildings that were constructed then had good tenancy. With the current economic constraints on liquidity, some tenants have started reducing rents around the City in areas such as Ruaka .

https://www.tuko.co.ke/337371-godsent-nairobi-landlord-reduces-rent-by-ksh-5000.html

Some malls have also seen very low tenancy inspite of them offering 6 month rent free options to potential tenants.

Architectural design.

The most affected buildings are the ones that have not been designed to be customer friendly. Some malls in Nairobi  have their designs built in a fort like manner, with very limited attractability to impulse buyers walking or driving past, hence very little traffic. Well designed malls such as Village Market are bursting in their seams due to the large traffic of humanity inside.

Apartments.

The same applies to apartment buildings. The most affected apartments are the ones that have their architectural designs without incorporating user friendly aspects. Some have poor ventilation, some have poor aesthetic appeal, poor finishes, crowded stair cases, limited car parkings , poor garbage disposals etc. These ones are the most affected.

Solutions.

Solution lies in redesign whereby the buildings are redesigned to incorporate user friendliness and offer space that is in current high demand eg room sizes, openings, outward attractiveness etc.

Architect Francis Gichuhi Kamau.

info@a4architect.com

0721410684