Middle Class  homes are where the cash is

PERIOD : September 12 to 18, 2016

15/09/2016 : The Daily Nation, DN2 Page 3 & 4

• The demand for housing in the country has always outstripped supply, with developers over the years having filled the gap in the middle and upper reaches of the sector, which were seen to be more profitable. But focus in these areas led to oversupply, with many developers now turning to the lower end of the market to survive.
• Four months ago, the Suraya Property Group unveiled its latest real estate development within the Fourways Junction development targeting the middle-income market. This is just one of the many projects the group has in its portfolio.
• Mr Peter Muraya, a co-director of the real estate firm, says that for anyone to make it in the current market, they have to address the needs of the middle- and lower-class markets.
• The company’s EnCasa project in Mlolongo is meant to address this market. The project features a series of apartments, ranging from bedsitters to three-bedroom units with a starting  price of Sh900,000 for a bedsitter, which is relatively lower than the market rate.
• “What the market needs to understand is that any real estate investment starts from somewhere. Young people need to understand that the bedsitter is the best place to start for someone who is interested in owning a big house one day. The logic is that once you buy the bedsitter this year, for instance, its value will have tripled in the next five years. You can then sell the bedsitter and buy a one-bedroom house going for about Sh2.5 million. By then, a single person or fresh graduate with a stable job or will have settled well in their job and might have earned herself a promotion, which means they can then graduate to a two-bedroom house going for between Sh4million and Sh6 million,” Mr Muraya explains. Read more

Owning a home in Kenya is not easy

15/09/2016 : The Daily Nation, DN2 Page  4

• According to a report by the Johannesburg-based Centre for Affordable Housing Finance in Africa (CAHF), the prices of houses in Kenya are way beyond the means of individuals who would ordinarily afford them.
• “Only about 11 per cent of Kenyans earn enough to support a mortgage. This means that most middle-income earners cannot afford a mortgage facility to buy an entry-level house,” the report said.
• The Kenya National Bureau of Statistics classifies middle-income earners as those earning between Sh23,672 and Sh119,999 per month, according to the report. Upper-income earners make more than Sh120,000 a month while lower-income earners make less than Sh23,671 per month.
• The Knight Frank Prime Global Cities Index for the second quarter of 2016 shows that the prices of luxury homes in the city increased by 2.1 per cent in the 12 months to June, and by 1.3 per cent in six months, a marginal increase compared to its heyday 10 years ago. The Knight Frank data show that the value of luxury homes in Nairobi have risen by 40 per cent in the last five years to June 2016.
• Mr Ben Woodhams, the Managing Director Knight Frank Kenya, says that, while buyers are aware of market conditions, “High-end buyers are discerning and willing to pay a premium for the right property based on location and quality. The stability in luxury residential sales has largely been sustained by realistic pricing. Transactions are still happening in low volumes, driven by a mix of buyers, including Kenyans in the diaspora who are currently benefitting from the foreign exchange environment.” Read more

Value of luxury homes records 40% growth in 5 years

15/09/2016 : The Daily Nation, DN2 Page  2

• The value of luxury homes in Nairobi has risen by 40% in the last five years as wealthy individuals invest in more real estate.
• A report by real estate firm Knight Frank, however , shows that the growth has slowed down recently; with the value of the properties rising by only 2.1 % in the year ending June.
• The report noted that the prices declined by 0.2 % in  the last three months to June.
• Knight Frank said that investment i prime property has proven a safe option compared with alternatives such as stocks
• Luxury properties target high net -worth individuals and are located in affluent areas
• Knight Frank defines a luxury home in Nairobi as any residential property priced from Ksh 80 Million
• They are stand alone units of high quality and finishing set on not less than half an acre and located in a posh city estate.

Title of contested Lavington land to undergo forensic evaluation

15/09/2016 : The Daily Nation, DN2 Page 2

• The high court has ruled that the title deed for a contested seven acre plot valued at about sh 2.4 billion in Lavington undergo forensic evaluation to determine whether it is genuine.
• The daughter of former mionister Mbiyu Koinange is contesting the title, which is held by a real estate development firm, Nairobi House
• The Directorate of Criminal Investigations in September last year obtained an order from the Kiambu chief Magistrate ‘s court to probe the title but the firm filed a suit challenging the decision.
• Justice George Odunga ruled thai it would be premature to block a probe into the firm’s ownership documents.

Kilifi landowners to receive Ksh 400 million compensation

15/09/2016 : The Daily Nation, DN2 Page 3

• Land owners in Kwa Chocha, Kilifi County, are set to pocket Ksh 400 million in compensation for their properties that will be taken over for expansion of Malindi Airport.
• The government will acquire 26 hectares close to the airport with 62 families set to receive the compensation
• The National land commission has already been given the go-ahead by the transport ministry to oversee the compensation since the land valuation has been done.
• The airport currently has four hangars, with six more set to be built through a public private partnership. A car park with 30 slots will also be built.
• Land compensation budgets are now eating a substantial chunk of funds set aside for the country’s infrastructural projects, with the government yet to find a formula to lower the cost.

NLC says land at centre of Fidelity bank – Muguga Green row is public

15/09/2016 : The Daily Nation, DN2 Page 3

• The national land Commission says that a piece of land contested by Fidelity Commercial bank and the residents of Muguga green Apartments in Westlands is public property.
• NLC said investigations revealed that the land the lender is laying claim to was allocated to the residents  as a children’s playground.
• Fidelity has filed a suit seeking to stop NLC from determining a dispute MUguga  Green residents filed against the lender on the property, arguing that the land administrator was biased.
• The Lender says NLC  Tribunal has in previous hearings, made partisan comments against it and did not allow the bank laywer to argue its case.
• The bank says it bought the land through a take over of the previous owner, Emtol properties and insists the firm has been paying land rates to city hall for the land.
• Muguga green residents, however, want the court to rule that FCB obtained the title deed for the land fraudulently.

Investors flocking into Laikipia drawn by huge chunks of land

15/09/2016 : The Daily Nation, DN2 Page 4

• The face of Laikipia County, which has long been dominated by ranches, conservancies, and pastureland, is changing fast as investors turn it into a real estate and holiday destination.
• The county, parts of which are  semi-arid, has also become a favourite  for individuals, cooperative societies and land buying companies, which buy land either to settle their members or for speculation, a move that have seen land prices shoot up.
• Those who own small pieces of land have also started selling them following the entry of foreign investors, who are offering attractive prices, ranging from Sh300,000 to Sh3 million and above for an acre, depending on the location.
• A number of big players have already camped in the area, attracted by the availability of huge chunks of land that can accommodate mega housing and holiday projects.
• Among these  investors are Thuo Investment Group of Companies, Mt Kenya Holiday Homes, Kiloran Developers, Angaza Real Estate Ltd,  Panari Investment Ltd, Mukima and Ridge Company.
• Thuo Investment Group of Companies, for instance, is planning a 600-acre gated community estate about 33 kilometres from Nanyuki Town.
• The company’s chairman, Mr Joseph Njoroge, says the project will comprise 400 modern-lifestyle units, each on a one-acre plot. They  comprise  two-, three- and four-bedroom bungalows, which will be going for Sh4.5 million, 5.5 million and Sh7.5 million each respectively.
• The estate, which borders Ol Pejeta Conservancy, will also have conference halls, playgrounds and a stone perimeter wall.
• The company has more than 5,000 acres along the Nanyuki-Rumuruti Road, part of  which it is selling to non-members at Sh280,000 per acre. Read more

Middle class estate set to add variety to high end Runda

15/09/2016 : The Daily Nation, DN2 Page 4

• Runda, the suburb that stretches from Limuru road to Kiambu road, has for years been a preserve of the wealthy.
• However, that is set to change thanks to an upcoming project by Maha properties known as Runda Paradise which targets the middle class. it is located next to Runda may.
• The project which began in April 2013, comprises 150 units of three and four bedroom houses.
• According to Norbet Mungai, the chief executive officer of Rock Asset Management, the Project’s transaction adviser, Runda paradise will transform the area by enhancing the lifestyle and security as well as giving middle income earners a chance to own homes in Runda.
• The units are going for between ksh 20 million and ksh 30 million each.
• Each bedroom is en suite, lounge, fitted kitchen and utility laundry yard and in built wardrobes in the bedrooms.
• It is just another posh estates, with the difference being that it is targeting  the middle class.

City’s luxury home values up by 40% in five years

15/09/2016 : The Standard, Home and away Pg 2

• Prices for luxury homes in Nairobi continue rising on the back of what researchers say is realistic pricing.
• Luxury home values in Nairobi  have gained by 40% over the past five years to June 2016. This is according to the Knight Frank Global Cities index for the second quarter of 2016
• At the same time, supply of prime residential property has been growing gradually, with such homes increasingly being located in gated compounds.
• The index showed luxury home prices in the city increased by 2.1 % between June 2015 and June 2016, and by 1.3% from December 2015 to June 2016.
• A marginal decline was recorded in three months to June.
• According to the Knight Frank report, the stability in luxury residential sales has largely been sustained by realistic pricing.
• The transactions are still happening in low volumes, driven by a mix of buyers, including  Kenyans in the diaspora who are currently benefiting from foreign exchange environment.
• Buyers are aware of market conditions. However, high end buyers are discerning and willing to pay a premium for the right property based on location and quality.

Bamburi partners with Mama Sarah Obama Foundation

15/09/2016 : The Standard, Home and away Pg 2

• Bamburi  cement Limited has signed a Memorandum of understanding with Mama sarah Obama Foundation for the construction of an early childhood development center in Kogelo, Siaya county.
• The ECD center is the first part of an educational campus that will eventually comprise a modern primary school and secondary school geared at helping orphans and children from poor families attain education.
• The construction of the facility has kicked off and is expected to be completed in two years.
• Bamburi cement is expected to use innovative green building solutions through the provision of cement stabilized earth blocks.

Kenya Tourism Board (KTB) launched a 6-month long market campaign across various cities in India.

“Knight Frank Prime Global Cities Index” indicates that prices of luxury residential property increased by 2.1% in Q2’2016 compared to a similar period in 2015

18/09/2016 : Cytonn Weekly report  No : 37

• Kenya Tourism Board (KTB) launched a six-month long marketing and promotional campaign in major cities of India in a bid to increase tourist arrivals from India by 21.0% at the lapse of the campaign period.
• The media campaign dubbed ‘Kenya Calling’ will cost over Kshs 20.0 mn. India has been cited to be the third best performing tourist source market in the world after US & UK and it is also one of the fastest growing tourist source markets to Kenya.
• This comes in the wake of improving Meetings, Incentives, Conferences, and Events (MICE) tourism in the country evidenced by a 13.9% increase in tourist arrivals at Jomo Kenyatta International Airport (JKIA) and Moi International Airport between April and May 2016.
• This year alone, Kenyan has hosted 3 major conferences and the greatest beneficiaries were airlines and hotels around Nairobi which recorded full occupancy rates over the period when the conferences were held.
• The subsector is expected to continue improving given that that Nairobi being the regional hub, is the most preferred venue for major conferences & conventions. Devolution has also been a major boost to the sector since the county governments hold seminars and conferences frequently. Read more

“Knight Frank Prime Global Cities Index” indicates that prices of luxury residential property increased by 2.1% in Q2’2016 compared to a similar period in 2015

• Knight Frank Kenya released the “Knight Frank Prime Global Cities Index” for the second quarter 2016.
• The index which tracks price changes in local currency, featured 37 key cities across the world. It categorizes luxury homes as property worth at least USD 0.8 mn (Kshs 80.0 mn).
• A key highlight of the index was that prices of prime luxury homes in Nairobi continued to increase, rising by 2.1%. There was a 1.3% price growth since the beginning of the year and then a 0.2% decrease between April and June 2016.
• The relatively low price increase over the past 3 months could be attributed to the fact that as the election year is drawing closer, the diaspora and local market are shying away from investing in property over uncertainty of the political environment in the country.
• Supply of prime residential property has been growing gradually, with such homes increasingly being located in gated compounds. Read more