MIP WEEKLY CONSTRUCTION INDUSTRY REPORT NO.16

Period: November 16 to 22, 2015

South Africa’s Delta property Holdings has entered Kenya’s property market after reaching an agreement to buy 45.5% stake of Buffalo mall for Ksh. 418 million, from Mauritius based Abland Diversified Holdings Limited, a company that is fully owned by South Africa’s Pivotal fund.
Kenyan real estate market is the most developed and mature in East Africa; Nairobi in particular, thus attracting new developers from all over the world and new forms of investments such as STANLIB Fahari I-REIT.

Kenya shilling has stabilized at an exchange rate of 102.20/30 to the dollar for the past few days. This is after the CBK held its benchmark lending rate at 11.50 %; saying that the exchange rate had stabilized and current account deficit narrowed.
Worth noting is that the shilling has been under pressure this year, partly because of global dollar strength and partly because of domestic issues such as widening trade gap and budget deficit.

Fidelity Commercial bank will put up a Kshs. 700 million headquarters in Westlands, Nairobi, to accommodate its growth and as a landmark of 22 years history of its existence.
The building will have 6 floors and 50,000 sq. feet of built up area. Its construction will commence in early next year.

Cheap steel from China have flooded the Kenyan market making it hard for local millers to compete and thus reducing amounts of steel bars, nails and others products churned from their factories.
On average, the millers sell a kilogram of steel at 65/= but Chinese imports retail at 55/= per kilogram a price the local millers are finding hard to match.
While the price of steel has gone down by a percentage of between 10 – 15%, it has a negative effect on the local labor market as local millers are retrenching in order to cut down on production cost

The new law society of kenya’s Conditions of sale 2015 are set to greatly reduce cases of manipulation on sale and transfer of property. Under the new conditions, property sellers are required to prove payment of land rent for three consecutive years as well as produce all legal consent necessary to effect registration of transfer.
The new property sale conditions provide a standard on the transfer process as opposed to previous cases where lawyers from both parties decided on content of the sales agreement.