MIP WEEKLY CONSTRUCTION INDUSTRY REPORT NO.29

PERIOD: March 7 to 13, 2016

Prices of high end homes in Kenya rose by 2.9% in 2015 from Marginal 1.4% performance recorded in 2014, according to a new report by property management firm Knight Frank.
According to a senior agent at Knight Frank two main factors played out – First, Luxury homes in the capital looked attractive to high net worth individuals last year as other investment classes such as equities under performed.
Secondly, demand still slightly exceeding supply for the top quality residential property, despite a recent increase in new build.Read More

According to a survey by Knight Frank, Nairobi is among the most sought after cities by high net worth individuals looking to invest in real estate.
According to Knight Frank’s wealth Report, Prime International Residential Index (PIRI), Nairobi ranked third in African cities as one for the world’s most important prime residential markets.
Nairobi scored 2.9% in appeal ahead of Lagos which lost 20 % in attractiveness to high net worth individuals.
The Kenyan capital ranked 33, behind South Africa’s Cape Town at 13 and Johannesburg which was ranked 26.

Centum has started preparations for the construction of an exclusive, 9,500 acre coastal city in Kilifi County, deepening its foray into high end real estate development.
Centum is building a city on land that it purchased last year from Rea Vipingo holdings – a plantations firm that sold part of its land as it de – listed from the Nairobi Securities Exchange (NSE)
Regulatory filings show that the project will be developed in phases. The first phase of the project will see Centum put up infrastructure on 900 acres of land at a cost of Ksh 794.3 million.
Centum has divided the 900 acres dubbed the economic hub – to include residential, commercial, industrial, institutional, recreational, and public zones.
The infrastructure development points to a likelihood that centum will be inviting investors to set up or settle in the area under lease in the same way as similar developments like the planned Northland city by the Kenyatta family and Tatu City.Read more

Atkins PLC, a London Stock Exchange listed multinational, has acquired Howard Humphreys East Africa Ltd, a leading consulting engineering company. Atkins is currently expanding into the African Market.
Africa is experiencing major investment in transportation, infrastructure and energy, presenting strong demand for world class multi-disciplinary design and Consultancy services.
This acquisition provides an excellent platform on which to develop Atkins’ presence in the region and is in line with Atkins’ strategy of targeted expansion into new locations.

An Egyptian Company Wadi Degla will build and manage a Ksh 3 Billion sports complex at the 775 acre Migaa gated golf community in Kiambu County.
Wadi Degla were appointed by the estate’s developer, Home Afrika based on the expertise in building sports Complexes. The 2.5 Billion Paradise Lost sporting facility, complete with eateries, is expected to be opened to the public in June.
Migaa Estate residents will have access to all the Wadi Degla facilities. Home Afrika launched Mitini Scapes last month, the first housing development within migaa consisting of 82 units of cottages and apartments.
Mitini Scapes has been constructed over the past four years at a cost of 700 million.

The construction of the Thika Superhighway has brought about a lot of change in areas neighbouring it.
Property values along the superhighway have in some instances gone up by 1000%, with the land owners capitalizing on the expected demand when the surrounding areas open up, as new developments keep often coming up every so often.
Two weeks ago, Housing Finance (HF) announced that it would launch two major housing projects on Thika Road this year, marking the latest real estate development that is seeking to attract more residents along the super highway constructed three years ago.
The ground breaking for the two and three bedroom apartments at clay works on Thika Road will take place in September, while the parceling of a 183 acre serviced plot scheme in Ruiru (Theta Grove) is expected to begin in July.
Britam is already building 1,100 housing units in Kamiti, Kasarani and on Thika Road. The project will be implemented by Housing Finance and the Kenya Building Society. Read more

In a bid to attract foreign direct investment, Kenya is preparing to roll out a Special Economic Zone in Dongo Kundu, Mombasa and later in Kisumu and Lamu. The Mombasa SEZ (300 – 500 acres’ site) will target to boost exports through a free-trade zone within the facility as well as create jobs as it forecasts a population of 27,000 workers within the SEZ. The Kisumu facility is aimed at growing export trade within the East Africa Community and the greater lake region.
According to World Bank report on Special Economic Zones 2015, most SEZs fail to meet their objectives because of:
- Inadequate unique facilities that differentiate them from ordinary national environment.
- Poor infrastructure
- Lack of high quality services
Africa is ranked bottom in the list of successful large scale developments such as SEZs and Master-planned communities. However, Kenya, Lesotho and Madagascar have shown some success in SEZs initiatives.
Kenya, for instance, has begun the expansion and modernization of the port of Mombasa and the planned construction of the standard gauge railway and the LAPSET project. These projects will benefit the free-trade zone but more efforts are needed in developing infrastructure in and around the SEZs. Read more