MIP WEEKLY CONSTRUCTION INDUSTRY REPORT NO. 25

PERIOD: FEBRUARY 8 to 14, 2016

Chinese developer Avic International claims it has lost Ksh 1.8 billion in construction delays arising from vicious battle that ensued between it and luxurious Villa Rosa Kempinski hotel, which is opposed to the planned construction of a rival 43 Storey facility in an adjacent plot.
Avic reports that an appeal Kempinski filed before the environmental watch dog (Nema) tribunal saw it lose Ksh 20 million for each of the 93 days that construction stalled awaiting the ruling.
Kempinski opened the second round of the battle with an appeal against Nema Tribunal’s decision to dismiss its case. The tribunal however threw out the case on grounds that it was filed outside the 60 day window following the award of an approval.Read more

Sino hydro Corporation has claimed in court that G.C retail is colluding with its sister company and Garden city project manager Mentor Management Limited (MML) to authenticate a Ksh 1.8 billion claim by the mall owners for delays in completion of construction works.
The Chinese firms say it recently discovered that G.C retail has majority shareholding in MML. Sino hydro adds that it would have objected to MML’s to hiring as project managers if it had been provided with the information before construction of Garden city began.
Sino hydro is challenging reports from MML that have been filed as evidence that GC retail deserves a Ksh 1.8 billion payout for delays in completion of construction. It says the reports cannot be relied on because of the conflicted relationship between GC Retail and MML.Read more

Andre Dzikus, Coordinator Urban basic services Branch UN – habitat, during a workshop for integrating sustainable building design into curriculum in higher Learning in Machakos County said that the basic syllabus of tropical architecture should be taught to students within their first two years of University. This is to make sure they carry this mandatory skill throughout their academic training.
Dzikus pointed out that the building sector in Africa consumes around 56% of the total national energy supply.

The Government is rolling out a plan that will see developers get incentives in an effort to bridge the housing deficit gap. According to cabinet secretary in the Ministry of Land, Housing and Urban Development, Jacob Kaimenyi, some of the incentives will include provision of serviced land, affordable financing and reforms of land related laws.
He said an opportunity exists because of the growing annual shortfall with the highest demand in low cost housing sector.
The housing deficit can be minimized if we encourage private sector participation through financial and non-financial incentives.

An excess of Ksh 5 billion will be spent to redevelop 11 estates within Mombasa County. (PPP) short term ventures. The county intends to use its land as equity for the project, which is set to start in March.
County Secretary Francis Thoya said the houses to be redeveloped shall be offered to members of the public to buy on long term lease basis or to be rented when necessary.

The National Housing Corporation plans to raise Ksh 5bn through a bond by June this year as it looks to build 600 housing units in the next few years.
NHC also plans to raise more funds by packaging some of its properties under an income real estate investment trust (I – REIT) and similar securities.
It is expected that the proceeds from the bonds will be used to finance the building of maisonettes in stoney Athi in Mavoko, Machakos County where the parastatal owns 150 acres, as flats in Mombasa and Kisumu.Read more

Kings pride has begun work on a 10 storey building in westlands, Nairobi, that will consist of a high end hotel and apartments.
The real estate developer expects the project, Golden palms to be completed in two years.
The apartments include 38 units of two – bedroom each targeting upper middle class earners.
The project is expected to cost Ksh 500 million and will be funded through internal earnings and borrowings from local banks.
Kings pride is also developing Runda Royales, Windsor gardens and Runda Park on Kiambu Road with a total of 373 housing units.Read more

There has been a consistent housing deficit in Kenya, estimated at an average of 200,000 units annually. The largest part of this deficit is at the low and middle income segments seeking to acquire affordable housing. As a result, most new developments are situated in the satellite towns where land is relatively affordable.
In a bid to address this, Shelter Afrique, a housing financier company is seeking partnerships with developers to construct affordable houses for the middle and low income housing segments. The company is responsible for the funding of Glenwoods Apartments, a 440-unit housing project in Ruaka. Safaricom Investments Cooperative has also ventured into this market and it has started the second phase of its Ruaka Ridge development within the same locality.
Research indicates that Ruaka area has an average rental yield of 6% p.a. and potential average price appreciation of 17% P.a for residential developments and is thus a lucrative market for investment. With a vast majority of residents in this area being within the middle to lower middle class, uptake of housing units is expected to remain high.Read more