Category: A4architect

JOINT VENTURES FOR CONSTRUCTION PROJECTS IN KENYA.

1. How does the JV work?

A Joint Venture works whereby a land owner does not have the requisite funding enabling him obtain financing from a bank. In most cases, banks require that the land owner fund approximately 30% of the total cost of the project including land and consultancy fees.

Where the cost of land is less than 30% of the total costs, banks require that the land owner top up the difference either using cash or construction input till foundation stage. This top up is what lacks to most land owners. Joint Venture partners come in to assist the land owner reach the required bank minimum of 30% contribution by the land owner.

2. What is the role of the Land owner in JV?

The land owners role in a JV is to avail clean land that has no encumbrances. The Land owner will need to employ consultants who will be able to negotiate with him for a good deal with the JV partner. In most cases, the Joint Venture partner takes a minimum of 51% of the total profits regardless of the contribution.

For example, say the value of the land is 15% of the total construction project cost. The Joint venture partner puts in the other 15% in form of cash so as to reach the minimum bank lending threshold of 30%. In a good Joint Venture negotiation, the Land owner should be able to get the majority percentage of profits even through the contribution between him and the Joint Venture partner is the same.

3. What would be the land owners contribution?

The land owners contribution is clean unencumbered land. We at www.a4architect.com can team up with the land owner to provide consultancy services, namely architectural, structural, quantity surveying, project management. This will push up the land owners contribution so as to enable a better Joint Venture negotiation deal.

4. What is the land owners benefit?

Once construction is through and the property sold, the land owner stands to gain form at least 51% of the profits from the proceeds . Profit is what remains after all costs of construction are added up together. The major costs to construction are
1.Land
2.Statutory fees to Local Authority and N.E.M.A
3.Building construction
4.External works construction eg roads, septic tank, bore hole, fence
5. Architectural, Quantity surveying, engineering, legal and project management fees.
6. Sales agents commissions and advertisement/marketing costs.
7. Bank loan interest repayments.

5. Who is the Joint Venture financier?

Joint Venture financiers are usually local banks. Once the land owner agrees with the Joint Venture partner in terms of the contribution, the Joint Venture partner together with the land owner register a company with each having commensurate percentage of ownership e.g. if they agree on 60 % vs. 40%, then the company ownership will suggest the same. The land owner then transfers the land title to the company.

This means that the land is now co owned the the original land owner together with the potential Joint Venture partner. With the co owned land, they both apply for a construction loan from a bank.
The bank charges the land title as collateral and releases the construction funds. Once construction is through, the original land owner and Joint Venture partner share the profits as per the company registration and the company is finally dissolved.

Francis Gichuhi Kamau, Architect.
www.a4architect.com
info@a4architect.com
0721410684

Francis Gichuhi Kamau, Architect.

LAND PRICES IN NGONG TOWN.

Land price in Ngong is dependent on the distance from Ngong town. Plots within Ngong town sell for 8 to 10m for a 1/8th acre which translates to 70m per acre or 35m per 0.5 acre. Plots 500m from tarmac go for between 4 to 5m per 1/8th which translates to 35m per acre or 18m per half acre.
Plots located 1km from tarmac costs around 2m per 1/8th which translates to 14m per acre and 7m per 0.5acre. Plots located 2km and above from tarmac cost between 1 to 2m per 1/8th which translates to 7 to 14m per acre or 3.5 to 7m per 0.5 acre.

Distance from main Ngong to Nairobi tarmac is the main determinant of price. Distance from Ngong town also affects price with plots closer to Nairobi fetching higher than plots farther away.

Ngong town is approximately 22km from Nairobi CBD.

Distance from large shopping developments such as the Juanco shopping centre also affects land prices.
An upcoming large supermarket development within the Ngong PCEA church land will also affect land prices.
Land in Ngong can be used to construct high-rise buildings.
There are no restrictions to the types of developments that can be constructed apart from the Kerarapon area which borders Karen and is zoned for single family residential use only.
Just like Karen whereby only one house is to be constructed in a minimum land size of 0.5acres, Kerarapon has similar land restrictions, the only difference being the minimum land size of 0.25 acres. Plots here sell for kes 5m per 0.25acres, translating to 20m per acre.

Land in Karen sells for 30 to 40m per acre for residential and 50 to 60m per acre for commercial land near or next to the main tarmac road.

Ngong area neighbors Kibiku, Matasia ,Kerarapon and Karen/Ololua forest.

BUILDING MATERIALS.

There are stone quarries in Ngong Oloolua area , Ongata Rongai Gataka area and Kiserian along Kiserian Isinya road. The Oloolua and Rongai stones are hard and mainly used for the foundation. The kiserian stones are soft and yellow in colour so they are mainly used for superstructure walling and decoration.

WATER.
nogng area has plenty of water from underground reservoirs. various individuals and organisations have sunk boreholes and already have existing water piping networks that serve the water to individual plots.

ELECTRICITY.

Blackouts are quite common during the day and there is power rationing on Thurdays during the day.

Francis Gichuhi Kamau, Architect.
info@a4architect.com

CONSTRUCTING BUILDINGS IN SWAMPY GROUNDS.

Demand for land has led mankind to think outside the box in order to accommodate and build on top of wetlands.
Land around Runda, Kiambu road and Kasarani, near Thika Super Highway is prone to dotted marshlands.

The land value per acre, approximately kes 40m per acre, is quite high.

This means that the extra cost of expensive foundations that can support buildings on top of wet lands will be able to be returned from the rental/sale income of the building. If the land value was low, it would be more prudent to look for alternative land that will not necessitate an increase in foundation costs.

PILE FOUNDATION.

Using Pile foundations is a good way of constructing on march lands. Holes are drilled into the wet ground till solid rock, water drained out and a casing fitted inside to prevent water from entering into the hole.

Steel rebar is then put in place and finally, concrete poured inside. The exterior casing is then removed.
A concrete column is now in place to support the building. Most of the high-rise 20 floors and above buildings worldwide are supported through this method.

COST.

This method requires specialized mechanization and engineering expertise hence there will be a slight increase in the foundation construction costs compared to other normal foundation methods such as the common strip foundation method.

The returns on investment will be eventually realized since the cost of pile foundations is very minimal compared to the cost of land and rental/sale value of the complete building.

Francis Gichuhi kamau, Architect.
info@a4architect.com
0721410684

RUNDA KIAMBU ROAD HOUSING ESTATE
GREEN ARCHITECTURE CONCEPT.

84 units have been conceptualized. To increase the greenery footprint, the following will be incorporated in the design.

1. Underground car park.

The plinth area below the ground floor will be designed into an underground car park. To save on light and ventilation costs, the underground car park will be raised 1 m above the ground level so as to allow for natural light and ventilation.

2. Roof garden.

The green plinth area occupied by the built up space will be replaced by a roof garden of the same plinth area size.

3. Wall planters.

The architectural design will strive to achieve approximately 40% of wall surface to be covered by green plant material designed into an aesthetically appealing pattern.

This will increase the green foliage cover and reduce the concrete jungle feel, thereby increasing project value.
A 200m2 ground floor useable space, including the car park will be achieved in the design.

SPACE SAVING.

The typical 1/8th plot has a surface area of approx. 430m2. A typical residence within such a plot will occupy the ground surface by approx. 130m2. This leaves out a total green space of 300m2.

In this project, we have designed the unit to incorporate 200m2 of useable ground level space plus a further 50m2 of roof top green garden , bringing the total green space to approx. 250m2. This is close to the available space achieved by the typical 1/8th acre plots. The actual space offered is 1/16th acre while the output green space offered is close to the effective space achieved on a 1/8th acre space.

By utilizing a slender, vertical space with 3 to 4 levels, including underground parking, we are able to offer the house occupants with green surface area nearly equivalent to space offered by 1/8th acre plots yet the overall space is actually 1/16th acre.

Francis Gichuhi Kamau, Architect.
info@a4architect.com
0721410684

CEILING TYPES IN KENYA.

A house ceiling is the part viewed from the building interior upwards under the roofing material.
In recent years, new ceiling materials have emerged such as the uPVC, copper and vinyl suspended ceilings.

The budget, aesthetic taste of the house owner/user and the usage of the room will determine the type of ceiling to be used. Hospitals, offices, schools and residential houses have each a different type of ceiling.

uPVC ceiling.

This is relatively new in Kenya. It offers the lowest costs, going for around kes 450 per m2 for the ceiling and kes 300 per m2 for the labour to fix the ceiling.

Its labour intensive so there will be a slight increase in labour costs. It uses less timber support joists since it comes in form of interlocking strips which join each other.

Its water proof nature is a huge advantage since most roofs are prone to leaking at one point in their life.
They come in a wide array of colours.

Soft Board ceiling.

These are very common in Kenya though they are slowly being replaced by the uPVC ceilings.
They cost approx. kes 700per m2 while the labour is around kes 200 per m2. They use more timber support joists compared to uPVC ceilings. Their advantage is that they are faster to fix hence saving on labour costs.

They get frequently damaged by leaking water from the roofs hence require frequent repair.
They come in various embedded patterns and are mostly white in colour.

T n G ceiling.

These are made from tongue and groove hardwood timber. They cost approx. kes 1200 per m2 plus kes 300 per m2 for labour. They are labour intensive so the labour costs will be high.
They are mostly varnished to bring out the natural hardwood finish which makes the rooms warm and cosy. They are very common in high end homes in up market suburbs such as Karen and Muthaiga.
They bring out the Feng Shui aspect of comfortability and health within the interiors since they are natural.

Gypsum ceilings.

These are mostly used in kitchens or areas which have high risk of fires since they are fire proof. These cost approx. kes 1000 per m2 plus kes 300 per m2 for labour.

Suspended ceilings.

These are mostly used in offices and banking halls where the floor to ceiling height is high enough, at least higher than 3m, to allow for the ceilings to be suspended.

Francis Gichuhi Kamau, Architect.
info@a4architect.com
www.a4architect.om
+254721410684

EFFECTS OF MERGER OF MINISTRY OF LANDS WITH MINISTRY OF HOUSING IN KENYA.

The current set up by the Uhuru Kenyatta Presidency whereby the Ministry of Lands has been joined together with Ministry of Housing and Urban Development is a very good move that will enable implementing policy such as envisioned in the Land Commission.

Land is the single most important resource of any country. Urban Development is mainly about planning the land use in the most effective ways. Housing is a basic human need that is directly affected by Urban planning and land use.

IDLE LAND TAXATION.

The land commission can now effectively implement policy such as idle land taxation. Situations whereby people Land Bank, as in buy land then hold it for several years as they wait for it to appreciate, can be reduced. Land banking should be discouraged through implementing idle land taxation.
This will ensure anyone who owns land has to fully utilize it either for housing, farming, industrial use or any other use as may be prescribed by the Government.

This will in turn create employment in the farms, increase the number of residences for sale/rent and increase the number of industries as land owners try to avoid paying for idle land taxation.

DEMAND AND SUPPLY OF LAND.

This will solve the issue of lack of housing and lack of employment.
As land owners rush to avoid idle land tax, others will rent out or sell their lands to Kenyans with the entrepreneurial skill to farm or create industries . This will create a situation of high land supply hence low land price. This will enable land price to be affordable to the majority of hardworking Kenyans.

30% LAND APPRECIATION.

Currently, land in Kenya appreciates at a whopping 30% annually. This appreciation might seem to be profitable to the individual land owner who is selling and gaining from the appreciation but to the Fiscal economy, this translates to a loss for the whole country since potential Kenyans with the entrepreneurial zeal to use the land to productive purposes such as farming or manufacturing will have been denied the chance to do so hence unemployment and less tax collection.

HOUSING.

Once land banking is discouraged through idle land taxation, cost of land for housing will be reduced proportionately throughout the country. Kenyans will now be able to access housing at affordable costs as opposed to the current situation whereby land for housing takes out close to 40% of total housing construction costs in a middle class suburb.
We hope that the new Cabinet Secretary in charge of Lands and Housing will be able to boldly assist the Land Commission to implement such strategic policies so as to enable all Kenyans to benefit.

Francis Gichuhi Kamau, Architect.
info@a4architect.com
www.a4architect.com

PERCENTAGE OF COST BREAKDOWN BETWEEN LABOUR, MATERIALS AND CONTRACTOR PROFIT IN CONSTRUCTION.

PROFIT.

In large constructions costing kes 500m and above, a modest profit of between 10 to 20% is desirable. These are projects such as 6 storey and above high rise buildings in major towns such as in UpperHill area and over 10km long bitumen standard tarmac roads projects around the country.

In smaller construction projects between kes 20m to kes 500m, a profit margin of between 15 to 25% is desirable. These are mainly murram road projects and high-rise buildings less than 6 storeys in height.

In projects costing less than 20m, profit margins of between 20 to 35% is envisioned.
The larger the project cost, the smaller the % of profit.

LABOUR AND MATERIALS.

In most projects, labour costs approximately 25 to 35% of the total project costs, with materials taking the rest.
In interior design projects, the labour required is intensive and the tasks take longer and have to be carried out by highly skilled workmen e.g wood works requiring carpentry and joinery, art work, electrical/mechanical works.
Such works usually have a 50% ratio between labour and materials.

An average residential house construction will tend to have the usual 30% labour versus 70% material costs. Within the construction, some tasks will have more % of labour than others.
For example, foundation works are mainly labour based during excavation and backfilling. Walling, windows, doors, plaster will have less % of labour compared to materials, approximately 20% labour. Roofing, fittings, fascia board, paint, electrical works, plumbing works will mainly have more % of labour compared to materials, approximately 40 to 50%.

The total works will bring the average to 30% for labour and 70% for materials.

Francis Gichuhi Kamau, Architect.
info@a4architect.com
www.a4architect.com

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