Gilgil barracks houses cost up by millions over poor planning

PERIOD: August 15 to 21, 2016

18/08/2016 : The Daily Nation, DN2, Pg. 2

• Tax payers will part with sh957m or nearly 3 times the original budget for construction of 144 apartments in Gilgil barracks due to poor planning, an audit report shows.
• Auditor general Edward Ouko says the cost of the decade old project has increased from the initial budget of sh346m.
• The project for 3-bedroom units to be built in 24 blocks was awarded to Capital Construction Company at a cost of sh346m and started in October 2005.
• The works were to end in September 2007, but an extension to June 2009 was granted due to slow progress
• By June 2009 the works were supposed to be done, the units were 61pc complete and the contract was terminated
• The contract for completion of the project was awarded to another contractor in three phases for sh660m

KCB launches one-stop centre for selling property

18/08/2016 : The Daily Nation, DN2, Pg. 2

• The Kenya Commercial Bank has launched a platform where developers can now showcase their real estate offerings for customers interested in purchasing property
• Dubbed “the Property centre”, the platform will bring together property developers, real estate agents and suppliers in the housing and construction industry, offering customers a one-stop shop.
• The centre located on the ground floor of Kencom House, KCB Bank’s headquarters, will share updated information on a wide range of property on sale
• The information will also be available on a digital format and customers can take a virtual 360 degrees tour of a specific property- all the rooms, amenities and surroundings- which they are interested in purchasing.

Cytonn starts SH5.5bn Situ Village project

18/08/2016 : The Daily Nation, DN2, Pg. 4

• The construction of a sh5.5bn exclusive gated community offering a live, work and play environment has started in Karen, Nairobi.
• Two weeks ago, Cytonn broke ground at the construction site of Situ Village in Olulua forest
• This is one of the firm’s over sh73b real estate projects in the pipeline
• Sitting on 29-acre piece of land, Situ Village is composed of four bedroom villas each on half an acre piece of land
• The development boasts a convenience store, a resident and members-only club-house, a jogging track, a hiking trail and a helipad
• The construction will be undertaken in 3 phases within two and a half years
• Situ Village’s superior location makes it the ultimate home of luxury and serenity that offers tranquility of country living while enjoying easy access to the city centre
• The development in close proximity to various retail stores and shopping malls such as the Hub, several fine dining options, the largest collection of international schools in Nairobi, and easy access to outdoor entertainment such as Giraffe Manor.
• Cytonn hopes to tap into investors looking to buy into the venture. Read more

Government starts swearing in new land board members

18/08/2016 : The Standard, Home & Away, Pg. 2

• The government has started swearing in county land board members, with the latest being Murangá county land control board
• Lands cabinet secretary, Jacob Kaimenyi had dissolved all the 47 land control boards in an effort to do away with corruption that was rampant in the sector
• While presiding over the swearing in ceremony, Murangá county commissioner, Evans Achoki said the government opted to disband the old land control boards to streamline the land sector
• New land control board members will be in office for a period of three years with effect from June 1, 2016.

New development to change Nairobi skyline

18/08/2016 : The Standard, Home & Away,Pg. 2

• A planned 40-floor new development will change Nairobi’s skyline
• The launch of Montave, a high-end mixed use development was announced earl in the week , with a promise to deliver Nairobi’s most prestigious addresses, offering the best in luxury, practicability at a convenient and central location
• Real estate firm has consult has been appointed to direct the design, construction and management of Montave, whose developers include an investment consortium comprising local and foreign investors
• The development will be set on a 3.54 acre site in Upperhill, Nairobi with the developers promising an “intricate mix of shopping, working, visiting, living and leisure.”
• “Montave will offer one million square feet space, 20pc of which will be retail space carrying about 60 outlets, including a supermarket , restaurants, fashion stores, convention centre and exhibition hall,” said the head of research and marketing at Hass Consult.
• The land on which the project will sit is valued at sh1.83b, coming to slightly above half a billion shillings per acre
• The site sits at the junction of lower hill road and Haile Selassie avenue and fronts Kenya railways golf course
• According to Hass consult, the construction of Montave is expected to begin in the second half of 2017 and is expected to be completed within three years
• Once completed the building will stand at 160metres making it one of the tallest in Nairobi.

Japanese firm targets growing ventilation system markets

18/08/2016 : The Standard, Home & Away, Pg. 2

• A subsidiary of Panasonic Eco Solutions Division, Japan, KDK company ltd has launched its largest ventilation equipment targeting Kenya’s thriving property market.
• The firm was started in 1909 as an electric fan company under the name Kawakita Denki Kigyosha (KDK).
• The launch was held in association with Hotpoint Appliances Limited at a Nairobi hotel
• Hiroo Ikeda, general manager, Middle East and Africa Marketing department of KDK, said the rapid growth of the real estate and construction industry in recent times has resulted in increased use of chemicals and rising focus on improvement of indoor air quality of buildings.

State halts work on SGR project

17/08/2016 : The Standard, Pg. 12

17/08/2016 : The Business Daily,Pg. 4

• The government has stopped work on phase two of the SGR until all the necessary route approval are given
• This is after it emerged the Chinese Contractor was already undertaking preparatory works, including the drilling of a tunnel on Ngong Hills without the necessary approval
• Land and transport principal secretary Irungu told the National assembly lands committee that the ministry was surprised to learn that there is already some work going on
• Among the sites where the contractors are said to have set up camps is Duka Ndogo in Narok county where Chinese workers were recently attacked by local residents
• Phase two of SGR project extends from Nairobi to Naivasha
• Committee vice-chairman Moses Sakuda pushed the PS to explain why the works were ongoing at Ngong Hills if there was no route approval given by the government
• The PS said the contractor may have been preparing the phase two of the launch to be presided over by president Uhuru on September 26.Read more

Investors are set to pay for environmental audits based on the risk levels of their projects, while Hass Consult announced the launch of off-plan sales of Montave, a Mixed Use Development in Upper Hill

21/08/2016 : Cytonn Weekly Report No.33

• Investors are set to pay for environmental audits based on the risk levels of their projects after the sector regulator ignored the Treasury’s declaration abolishing the charges choosing instead to introduce caps on the fees. The National Environment Management Authority (NEMA) has now categorized projects into three bands based on their levels of risk, that is: high, medium and low risk to the environment.

1. High-risk projects include mega real estate’s developments, roads, large hotels, mining and energy plants and they will attract a maximum of Kshs 40 mn and a minimum of Kshs 50,000
2. Medium-risk projects include hotels with less than 150-bed capacity, petrol stations and shopping centers, office blocks and stores not exceeding 10,000 square meters. Developers will pay a minimum of Kshs 20,000 and a maximum of Kshs 10 mn, while
3. Low-risk projects include churches, bus parks and stadia which will attract a fee of between Kshs 10,000 and Kshs 3 mn.

• Under the new regulations therefore, developers will pay the maximum of 0.1% of the project cost but within the given price ranges for the risk band. In the past, the National Environment Management Authority (NEMA) has not been differentiating projects while charging the fees.
• Investors have since September 2013 been paying a minimum of  Kshs 10, 000 or 0.1% of project cost without an upper limit, making it costlier for big projects.
• Before 2013, the environmental impact assessment (EIA) fees were set at 0.1% of the worth of the project with a maximum cap of Kshs 1.0 mn. In line with EIA fees scrapping by ministry of finance, NEMA is working administratively to reduce the timelines for processing environmental impact assessment (EIA) project reports from 45 days to 30 days.
• At the same time, the lands Cabinet secretary communicated that the government is crafting a land evaluation control index to tame the demand for hefty compensation by land owners during compulsory acquisition and regulate the disparities between private and state valuers which has threatened to hold back mega state development projects in the country
• Hass Consult announced the launch of Montave in Upper hill, a high-end mixed use development, whose construction is expected to begin in the second half of 2017 with a project period of three years.
• Montave is a proposed 40 floors and 160-meter-high mixed use development that presents an intricate mix of shopping, working, visiting, living and leisure, featuring a rooftop helipad at 3.54-acre site in the Upper Hill area of Nairobi. Hass Consult has been appointed to direct the design, construction and management of the development whose developers comprise of both local and foreign investors.
• Montave is currently selling, off-plan with the one-bedroom luxury apartments priced at Kshs 8.9 mn, Kshs 12.9 mn for the two bedrooms and Kshs 22.9 mn for the three bedroom apartments.
• The high-rise project highlights the trend by developers to maximize on land-use due to high land costs. We therefore remain positive on the performance of the project following its location, Upper Hill that presents a good opportunity for the development due to its improving road network, sewer lines, its proximity to the CBD and it’s a major office node in Nairobi.
• On the other hand, the location has very few residential units and retail, hence creating a supply to a ready market for the same. It’s also set to attract investors to tap on the market yields averaging 10% retail, 9% office and 5.5% for residential. Read more