A look at Kenya Real Estate Finance and Financial Modeling, and the Ultimate Guide for Realizing Optimum Returns on Investment for Kenya Real Estate Investors.

A Real estate financial model is an appraisal designed to represent a real estate asset’s performance or forecast of its financial performance in the future. In real estate financial modelling, a financial modeler analyzes a property from an Investor’s perspective and determines whether the Investor should invest in a proposed real estate project, based on the risks and potential returns. Besides, real estate projects require detailed financial analysis of construction, operations, and financing to ensure that returns targets are met and that there is confidence in projected results.

There are four main types of property deals that require financial modeling to realize optimum return:

• Real estate acquisition, where an investor wishes to acquire an existing property, add value to it or change its use entirely, and then rent/sell it at a higher price.
• Real estate development, where an investor wishes to build a new property on his/her land, or through a Joint Venture, and then he/she rent the property or sell it upon completion.
• Off-plan development, where an Investor wishes to develop a new property, but for pre-sale rather than waiting for its completion.
• Real estate renovation, where an investor wishes to acquire an existing property, change it significantly through renovation, and then sell/rent it at a higher price.

For an investor to realize an optimum return from either of the real estate deals mentioned above, he/she needs to develop a financial model, which will inform on expected return on the proposed investment based on the market risks and assumptions. The following is a guide on developing the real estate financial model to enable investment decision making for optimum return on the investment.

State the Assumptions:

A real estate financial model is a set of assumptions about future real estate market conditions that drive projections of a property’s revenue, earnings, cash flows, and the real estate financial appraisal. As such, the real estate financial model’s assumptions should be based on rental yields, vacancy rate, loan to value ratio (a measure of leverage built into the property investment), Loan to Cost ratio (property’s projected cost), and the amortization period (the period to pay a loan).

The following are the different assumptions that an investor or a real estate financial modeler should make.

1. Area Assumptions, which includes the gross land area, built-up area, leasable area, and property size.
2. Hard cost Assumption, which includes land and construction costs (substructure construction cost, walling construction cost, roofing construction costs, the cost for finishes, and other construction costs such as for site preparation, landscaping and leveling, and infrastructural costs)

• The soft cost assumption, which includes the costs realized while running the project. This includes but is not limited to the site operation fees, consultancy fees, statutory permits, facility management fees, insurance, legal fees, audit fees, taxes, utilities, sales & marketing, maintenance, and other operating costs. The growth rate and income source are also important and hence should be included.

1. Revenue assumptions, for example, the selling prices, rental prices, and overall revenue.
2. Financing assumptions which include repayment of loan capital and interest.
3. Cash flow assumptions which include receivables and payables.

• Transaction assumptions include the purchase costs, legal costs, and exit costs.

State the operating expense:

The profitability of any real estate investment depends on the sustainable control of the operating expenses. The primary categories of expenses that a Financial Modeler should consider are real estate taxes, administrative costs, maintenance and repairs, replacement, utilities, and insurance.

While building the operating assumption :of a rental generating property, the real estate financial modeler assumes a rent-per-square-foot figure for each tenant, an annual growth rate, and then calculates the base rental income and expense. Furthermore, the Financial Modeler should calculate the absorption and turnover vacancy in periods when tenants might break the lease agreement, calculate any associated incentives when new tenants move in, and factor in the associated expenses.

A Financial Appraisal analysis is a set of calculations that projects the financial return that a proposed real estate investment is likely to generate. The real estate Financial Appraisal analysis estimates revenues that are likely to be obtained, the costs that will have to be incurred, and the net financial return that the investor expects to achieve. As such, the real estate Financial Appraisal Analysis helps to determine the property’s anticipated monthly cash flow and expenses, taxes, and expected return on investment.

In building a real estate Financial Appraisal Model, the Financial Modeler analyzes the revenue and expenses to obtain the Net Operating Income (NOI) and the capital costs used to calculate the future cash flows. It’s critical for investors to make their Financial Appraisal Model as accurate as possible, as an inaccurate net operating income and cash flow projection can lead to a poor investment decision.

Calculate Returns on Investment:

To calculate the returns, the Investor or Financial Modeler should include the Cash Flows to Equity for each year, and the exit proceeds, including debt repayment and transaction fees. Internal Rate of Return (IRR) should also be calculated based on the investor’s initial contributions, the refinancing, the annual cash flows, and eventual sale of the property. Other investment decision analysis to consider for calculation to determine return on investment include; the Net Present Value, Equity Multiple, and various Profit Margin ratios.

Despite the attractive returns earned in investing in real estate, many real estate investors end up making poor decisions that have led to investments that do not meet their target rate of return. Therefore, it is prudent for an investor to have an effective, workable financial model that enables business ideas and risks to be estimated in a cost-effective way to gauge the venture capital requirements and expected returns, hence facilitating decision-making on the most favorable Investment venture.

Buildafrique Consulting Group is a specialist in Real Estate Project Finance, Real Estate Financial Modelling, Investment Appraisals, Preparation of Real Estate Business Plans, Feasibility Studies, and Joint Venture structuring.

B.) WEEKLY NEWS HIGHLIGHTS

             MAJOR ECONOMIC NEWS HIGHLIGHT.

i.) KRA tax collection to increase by Ksh 10 billion on tax raise

The Kenya Revenue Authority (KRA) adjusted the excise duty on 31 goods, including fuel and alcoholic beverages, by 4.94 percent in line with the average inflation rate for the year to June 2020. As such, the government expects to collect Ksh 10 billion in the 2020/21 financial year beginning 1^st October 2020. In a statement on 6^th October 2020, KRA explained that it had to adjust the excise duty on the products, to avoid a situation where the rising inflation rate affects the country’s revenues.

ii.) Retailer Investors domestic debt stake rises by 30.2 percent

Retailer’s government debt stake increased by 30.2 percent (Ksh 37.6 billion) in the last nine months, at a time when bank deposit rates went down as investment returns from stocks and properties reduced. According to the CBK, retail investors who comprise of; individuals, Saccos, listed and private companies, self-help groups, educational and religious institutions, now hold 4.68 percent (Sh161.9 billion) of the total domestic debt, which stood at Sh3.46 trillion at the end of September 2020. According to Sterling Capital, the rising interest in government securities by retail investors was informed by the guaranteed returns.

iii.) Kenya private sector rebounds strongly on easing the Covid-19 restriction measures.

According to the Purchasing Managers’ Index (PMI) survey data by Stanbic Bank, which was released 5^th October 2020, the private sector saw growth hit a two-year high in September 2020 as the government relaxed Covid-19 restrictions. According to the survey, the PMI index posted 56.3 points in September 2020, the highest reading since April 2018, indicating a sharp improvement in the private sector economy. The index rose from 53.0 in August 2020 and marked the third successive expansion since July 2020, when President Uhuru Kenyatta initiated the gradual reopening of the economy.

iv.) Kenya backtracks on digital taxes

Kenya has dropped its earlier proposal that firms which failed to pay value-added tax (VAT) and a 1.5 per cent digital service tax be blocked from operating in the country. A new regulation published by the National Treasury to take effect on 1^st January 2021, indicated that non-compliant firms and digital suppliers would instead face fines and sanctions under the Kenya Tax Procedure Act.  The regulation imposes a cash penalty equivalent to double the amount dodged or a Sh100,000 fine for failing to comply with the electronic tax system.

            CONSTRUCTION INDUSTRY HIGHLIGHTS

i.) Kenya construction industry growth forecast reduced to 2.5 percent

A study by GlobalData, a leading data and analytics company, has cut down the construction output growth forecast for Kenya in 2020 to 2.5% from the previous forecast of 3.1%. According to the study, the construction industry in Kenya and the Sub-Saharan Africa region is expected to enter into a deep recession in 2020 as a result of the policies imposed to contain the spread of the Covid-19 pandemic, disruptions to trade and commerce, a collapse in tourism, weaker investment and faltering consumption due to massive job losses and curfews.

ii.) Construction works resume at Konza Technopolis

According to Konza Technopolicies Chief Executive officer John Tanui, construction works at the Konza Technopolis site resumed in earnest after a break occasioned by the Covid-19 restrictions. The CEO further stated that contractors were working 24 hours with over 1000 workers on site to recover lost time. While touring the site on 5^th October 2020, the Permanent Secretary for ICT Jerome Ochieng’ noted that the government was satisfied with the project’s ongoing construction works, which it has invested Ksh 100 billion.

iii.) NCA to construct a Centre for Construction Industry Development (CCID) at the Konza Technopolis.

Through the National Construction Authority, the Kenyan government plans to create a center of excellence for the country’s construction industry to address its challenges. During a visit to the Konza Technopolis on 8^th October 2020, Public Works Principal Secretary Gordon Kihalangwa noted that the National Construction Authority (NCA) would begin construction works in a year on three parcels of land earmarked for the development of the centre.

iv.) Construction of 688 housing units in Machakos County to proceed

The construction of a Ksh 3.2 billion residential housing project by Erdemann Property will proceed into phase 3 after the National Environment Tribunal dismissed an appeal lodged by London Distillers to stop the construction of the property. The firm was claiming that the property, which is 20 meters away from its distillation plant, possesses the risk of future conflicts due to industrial emissions.  Nevertheless, the tribunal found that the alcohol distiller failed to demonstrate the effects of its industrial emissions on human health.

              COMMERCIAL REAL ESTATE HIGHLIGHTS

i.)  KMRC rejects mortgage funding bids worth sh16.5 billion

The Kenya mortgage refinance corporation rejected a Ksh 16.5 billion funding bid by commercial banks, stating that the bids failed the tough World Bank test following a portfolio review in July and August. According to KMRC Chief executive Johnson Oltetia, more than three-quarters of home loans that were submitted for the first phase of refinancing in the State-backed affordable housing plan did not meet the stringent requirements set by the World Bank Group.

ii.) Nairobi County to roll out a new property valuation system

The Nairobi Metropolitan Services is set to roll out a new property valuation set to determine land rates, upon approval by the Nairobi County Assembly. According to the County Annual Development Plan for 2020/2021, the new system is set to be rolled out between the financial years 2020/21 and 2021/22 at a Ksh 160 million cost. Furthermore, the system is expected to increase the number of properties in the supplementary valuation roll by 5,000.

iii.) European fund set to buy Ksh 1 billion student hostels in Kenya

European fund InfraCo Africa is set to buy a Ksh 1 billion stake in student hostels developed by property developer, Acorn Holding. According to the Acorn Holding’s offer documents, the firm is creating a development real estate investment trust (D-Reit) to build the student hostels and an investment real estate investment trust (I-Reit) to acquire the properties and hold them for rental income. InfraCo, a European Fund, has committed to invest Sh300 million in the D-Reit and a further Sh700 million in the I-Reit.

iv.) Nairobi County government accused of illegally evicting tenants from the county houses.

The County Government of Nairobi is on the spot foricting tenants from the County houses illegally, despite issuance of rent waivers by the Nairobi Governor Mike Sonko. The Nairobi County Assembly raised concerns over the lack of enforcement of the waivers declaration for Nairobi County houses tenants and alleged continued harassment, despite the rent and rates waivers. According to Kayole Central MCA Jeremiah Themendu, the directives for rates and rent waivers issued by Governor Sonko through advertisements and informal declarations are rarely followed by officers from the Governor’s office.

C.) KENYA REAL ESTATE TRENDS

ii.) Affordable housing market drive real estate developments in Kenya

The affordability Concern continues to shape the residential sector of the Kenya real estate market amid the economic crisis attributed to Covid-19 pandemic. As such, more people are shifting to cheap apartments as the demand for affordable houses increase. Real estate developers are also taking advantage of the market gap resulting from the shortage of affordable houses in the Kenyan residential market. According to the World Bank Group study, Kenya needs to build about 200,000 new housing units every year, to keep pace with population growth and housing needs.

The affordability concern has driven developers to solidify their mark in Nairobi’s affordable real estate space. Centum real estate, for instance, launched an affordable housing development dubbed ‘365 Pavilion Place Apartments’, which consists of 975 units in Ruaraka. At the same time, Shelter Afrique, a Pan-African housing development financier, signed a Memorandum of Understanding (MOU) with two Chinese construction firms, Amberton International Holdings, and Sichuan Huashi Enterprise Corporations E.A. LTD, to scale up the development of large-scale affordable housing projects in the Kenyan market.

ii.) Developers embrace green construction to enhance sustainability

To ensure sustainability, developers and construction professionals continue to embrace the green building technology in new buildings. Building professionals and policymakers in the country have also been urged to focus on green building to enhance sustainability and protect the ecosystem. Furthermore, green technology is expected to continue to grow, as the green construction has become an expected standard by homebuyers, renters, and commercial tenants.

Construction professionals continue to adopt the green building practices geared at reducing greenhouse gas emissions within the city and ensuring a clean environment, sustainable use of water, efficient and renewable energy, clean sanitation, and waste management. Green construction includes the use of technology to lower a building’s carbon footprint and the use of resources and building models to reduce the use of resources.

D.) GLOBAL REAL ESTATE TRENDS

i.) Global housing prices rise amid the coronavirus pandemic

During the second quarter of 2020, the global housing market remained vibrant, with notable resilience in Europe, Canada, and the U.S. According to the global property guide, housing prices rose in 38 of the 49 world’s housing markets surveyed in quarter 2 of 2020, but declined in only 11 countries. The global property guide survey further showed that in the second quarter of 2020, 34 of the 49 countries surveyed had a stronger momentum in quarter 2 of 2020 compared to the same period in 2019.

The U.S housing market remained robust in the second quarter of 2020, with the Case-Shiller seasonally-adjusted national home price index rising by 3.62% during the year to Q2 2020, an improvement from the previous year’s 1.57% growth. At the same time, housing prices surged in European countries, such as Turkey, Germany, Slovak Republic, Estonia, and Portugal. The global housing price rise was majorly attributable to the increased demand for housing units. On the contrary, in Kenya, housing prices reduced as vacancy rates increased in the second quarter, majorly attributable to expatriates’ exit from the country.

ii.) Global retail footfall surge amid easing of lockdowns

Footfall, sales, and retail occupancy rates have begun to recover from lows experienced in the first half of 2020 following government easing of lockdowns in many countries worldwide. Nevertheless, operating conditions continue to be challenging, with the pandemic’s impact becoming more apparent during the second quarter of 2020.

According to the JLL, a global real estate consulting firm, the retail sector’s short-term outlook remains highly uncertain, with ongoing social distancing measures worldwide and new outbreaks limiting the recovery for many retail real estate operators. Most retailers continue to be cautious and are focused on returning to profitability and reassessing strategies to best meet the shift in buyers’ shopping habits, given the uncertainty about future prospects. The situation applies to the Kenyan retail sector as malls, and retail footfall starts to rise attributable to the second phased reopening of the economy.

E.) COMMON REAL ESTATE & DEVELOPMENT CHALLENGES, AND SOLUTIONS

Project Finance, Capital Raising, and Joint Venture Structuring for Real Estate Investment Project:

 YOUR CHALLENGE:

One of the major challenges to many Real Estate Investors and developers is roping in Finance into their development projects, capital raising, and structuring of joint venture deals for the projects in order to bridge the finance deficit occasioned with not having all the financing to meet the project Budget.

THE SOLUTION:

There are various forms of Real Estate and Project Finance and Capital raising solutions in the Market, majorly classified as Debt and Equity Financing. Debt financing usually comes in form of a mortgage or development loan requiring the investor to provide collateral as security for the mortgage, while equity financing will often require the investor and financier to form a joint venture Special Purpose Vehicle, that governs the undertaking of the project as well as the terms and condition of the relationship between the investor and financier.

Debt and Equity financing can come in many forms for Real Estate financing in Kenya. The following are the solutions available for real estate financing in the Kenya Real Estate and Development Market.

1. Equity Finance, for joint venture structured project, whereby the developer transfers land to a project company while the Capital Investor provides funds for the construction of the project. The Capital investors in this case are usually institution investors, Fund Managers, or High new worth individuals with funds and are looking for projects with good returns for their investment
2. Contractor Debt Finance, whereby a Contractor comes into the project as both an Investor and Contractors in two separate contracts, one as investor in either equity in form of labour and materials, or structured debt, and at the same time having a separate contract as the building contractor for the project. The Building Contractor finances the project through building materials and labour, whereby the investment is recovered later in the project through proceeds from sale of the final product as debt recovery, or by the contractor converting the investment into equity in the project.
3. Consultant’s Debt and Equity Financing; in which the Project Consultants or Consortium may lend their consultancy expertise into the project as debt or equity to be recovered as debt from revenue or proceeds generated later in the project at higher returns, or convert the investment into equity. similar to Contractor Equity and Debt Finance.
4. Buyer Financing, whereby a developer may decide to sell the investment property or final market product at cost or at the exact cost invested into the development, that is, selling the investment property at no profit in order to attract potential investor who are keen to make a good return once they sell the investment property at a profit after the implementation of the project of after completed. In this case, the developers or investors could opt to reduce the price of redundant properties to attract buyer investors who are unable to buy at a higher price due to reduced income.
5. Pre-Sale Finance, whereby a developer raise part of financing through off-plan sale of the development units or products, before commencement of the implementation of the project.
6. Institution Debt Finance, from local and international Debt Fund institutions.
7. Bank Debt Finance, from your local or international banks.
8. Islamic Finance, or Sharia-compliant finance.

Capital raising for a development project takes various structured step processes which includes Consulting and Advisory Phase, Investor Relations Phase, Transaction Phase, and Implementation and Recovery Phase.

THE CONSULTANT TO ENGAGE:

The Consultant to engage for Project Finance and Capital Raising for your development project is a Project Finance Consultant.

F.) THIS WEEK ON FREQUENTLY ASKED QUESTIONS (FAQs), AND ANSWERS

QUESTION:

What are the cost saving measures available while constructing a home or real estate project in Kenya?

ANSWER:

With construction costs rising at an alarming rate due to effects of inflation, rising oil prices, and cost of doing business, investor and developer have become keen into looking at various ways that can bring saving of construction costs in project development and real estate investments.

The following are various ways and methodology that investors and developers can consider in reducing or making a saving in overall construction cost of a development project:

a) Market Survey and Materials Cost Engineering: – This is a process carried out after the design and project costing has been completed by the Architect and Quantity Surveyor. The process involves survey of market prices of various materials and finishes, and re-engineering the project specification to fit the Client budget. The exercise also helps with discovering new products in the market that falls within the set budget.

b) Use of Local Materials: – Transport costs have been seen to add up to between 40 % and 80% of the construction materials costs on some materials like sand and ballast. Using local materials contributes to substantial saving in cost of transport, as well as building labour costs through the savings realized by use of local workmanship for local building materials.

c) Bulk Purchase of Materials: – Bulk purchase is an exercise that first involves resource scheduling of construction materials for the entire projects, so as to allow one-off or bulk purchase for particular materials from a single supplier or purchase of materials at whole sale price. The savings are realized through economies of scale for bulk purchase, as well as negotiated discounts. Bulk purchase can also involve importation of bulk quantities of materials finishes from off-shore manufacturers at a much discounted price.

d) Use of pre-fabricated or ready-to-fix Materials: – The use of pre-fabricated or ready-to-fix Materials provides savings in labour costs, together with shortening the construction period which is also associated with more savings. Labour forms almost 22% of the costs of construction on normal construction processes; therefore using ready-to-fix or prefabricated materials may contributes to substantial savings through use of less labourers and shortening the period of construction.

e) Choice of Procurement Method: – With many procurement methods in the market, the choice of the same would either result in savings in the project or additional costs associated with the mode of procurement. Labour Contracts have been seen to contribute to savings of upto 20%, although the developer or investor is required to invest a substantial amount of his or her time into the management of the project. Design and Build procurement method has also been seen to contribute to savings in design costs, in which design costs are either omitted or factored in the entire design and build total costs but at a discount.

G.) THIS WEEK ON DEVELOPMENT COSTS ANALYSIS – KITENGELA AREA, KAJIADO COUNTY

This week’s focus on Development Cost Analysis is for Kitengela Area in Kajiado County, this being another fast growing satellite towns in the Metropolitan area of Nairobi. The Development type in this area according to the land-use and county zoning regulations includes Apartment Blocks, Maisonettes and Town House, Shopping and Retail Complex, and Warehouse and Godowns.

Below is an analysis of Construction Cost per Square Meter (SM), for the option of procuring the development project through a Building Contractor, or an option of direct procurement of the Materials and Labour through a Labour Contractor for recommended building types.

H.) THIS WEEK ON REAL ESTATE PRICE ANALYSIS – KITENGELA AREA, KAJIADO COUNTY.

The Real Estate price analysis focus for this week is on land, sale, and rental prices for a 2 and 3 bedroom apartment in Kitengela Area – Kajiado County. The data were obtained through surveys, and analysis of asking prices on property listing in Nairobi.

i.) Sales price – Apartment 

ii.) Rent price – Apartment

iii.) Land price per acre (commercial/residential)

I.) CENTRAL BANK OF KENYA INTEREST RATE WATCH – (T-BILLS)

The money market remained liquid over the week ending 02^nd October 2020, supported by government payments, which offset tax receipts. The interbank rate, which is an indicator of liquidity levels in the banking sector, went down by 1.4 percentage points to 2.34 percent, indicating reduced demand for funds.

91 day T-bill increased by 0.07 from 6.400% previous week rate to 6.468%. CBK offered a total of Kshs4 billion, and bids amounted to Kshs7.458 billion, of which 7.375 billion was accepted. The volume on bids received increased week on week basis. 182 day T-bill increased by 0.01% from 6.839% previous week rate to 6.853%. CBK offered a total of Kshs10 billion, and bids amounted to Ksh 3.930 billion, of which Ksh 3.329 billion was accepted.  The 364 day T-bill increased by 0.02% from 7.744% previous week rate to 7.762%. CBK offered a total of Kshs10 billion, and bids amounted to Ksh 15.010 billion, of which Ksh 14.084 billion was accepted.

J.) KENYA EQUITY MARKET INDICES

The equity market experienced a mixed reaction during the week ending 9^th October 2020 as equity turnover, and the total shares traded increased by 47 percent and 33 percent, respectively. On the other hand, NSE All-Share Index, NSE 20 and 25 share index and Total Equity Deals plummeted by 0.43 percent, 1.11 percent, and 12.54 percent, respectively.

The I-REIT turnover and I-REIT deals reduced by 74.28% and 72.41%, respectively, indicating a slowdown in economic activities.

K.) KENYA CAPITAL MARKET ANALYSIS

The liquidity in the capital market was high during the week ending 9^th October 2020, with Safaricom (5,908,500 shares), Equity (3,404,500 shares), KPLC (1,751,800 shares), and Kenya Re (688,300 shares) being the most traded stocks during the week.

Top gainers at the bourse were led by Carbacid Investment Plc, whose value rose by 8.43% to KSh 9.00. It was followed by Flame Tree Group Holdings, whose value rose by 8.00% to KSh 1.35. Other gainers were Britam Insurance, whose value rose by 3.56% to KSh 7.56, Kenya Express at KSh 4.42 (3.79%), and Diamond Trust Bank closing the top five gainers list at KSh 64.00, an increase of 2.40%.

The biggest loser was TCL Kenya, whose value declined by 6.51% to Ksh 1.58 cents. Eaagad limited followed it at Ksh 13.20, a decline of 5.38%, then Longhorn Publishers at Ksh 4.51 (5.28% decline), Uchumi at KSh 0.29 ( 3.33% decline), and Equity Bank, whose value settled at KSh 34.10, a drop by 2.57%.

L.) CURRENCY HIGHLIGHTS

The Kenya Shilling weakened against major international and regional currencies during the week ending 08^th October 2020. It exchanged at KSh 108.51 per US dollar on 8^th October 2020, compared to KSh 108.37 per US dollar on 1^st October 2020.

The usable foreign exchange reserves plummeted to $8.627 billion (Sh935.25 billion), from $8.838 billion (Sh957.86 billion) in the week ending 8^th September 2020. That meets the CBK statutory requirement to maintain at least four months of import cover and the region’s convergence criteria of 4.5 months of import cover.

M.) FACTORS THAT WILL SHAPE THE REAL ESTATE AND OTHER MARKETS IN THE NEXT ONE WEEK.

i.)  Re-opening of schools.

On Tuesday, 6^th October 2020, the Education Cabinet Secretary Prof. George Maghoha announced the re-opening of public and private schools following six months of closure due to the Covid-19 pandemic, with students in Grade 4, Class Eight, and Form Four expected eport back to school from Monday, 12^th October 2020. On the other hand, Kenyan universities and colleges closed in March 2020 over Covid-19 pandemic, started a phased re-opening on 5^th October 2020 as the country gears towards full resumption.

As the schools re-open, consumer spending is expected to increase, and hence more activities in the private sector are expected to resume in the coming weeks as schools carry out essential development activities associated with building infrastructures, ranging of refurbishment, new construction, and renovations.

Moreover, as universities and colleges resume learning, the demand for housing will also increase for lecturers and college students, and consequently, the student housing market is expected to recover in the coming weeks, boosting investors’ cash flow in the student housing market.

ii.) The partial re-opening of the economy

The 2^nd phase of the gradual re-opening of the economy on 28^th September 2020 is set to boost demand for services in the hospitality sector and improve the general economy. In the phased re-opening of the economy, President Uhuru Kenyatta re-opened social places like Bars and Churches, increased the maximum number of people gathered together to 200, and shortened the curfew hours to between 11 pm- 4 am.

As a result, most hotels, bars, retail shops, and eateries are expected to open up, increasing the hospitality and retail sectors’ occupancy rate and sustainable cash flow in the sector. Moreover, more businesses are expected to re-open in the fourth quarter of 2020, increasing the commercial office space’s occupancy rates and, hence, rental cash flow.

N.) UPCOMING REAL ESTATE EVENTS AND TRADE SHOWS IN THE COMING ONE WEEK.

i.) Exposition: Nairobi Construction Expo – The exposition will bring together construction industry policymakers, industry leaders, and contractors from across Kenya and the East African region.

Date: 11^th October 2020

Time: 0800 PM

Venue: KICC

Event Organizer: http://mikonoexpogroup.com/nce/

ii.) Webinar: How industrial real estate will evolve– The webinar will discuss the evolvement of the warehouse design and developments, and the associated architectural challenges.

Date: 15^th October 2020

Time: 04:00 PM

Venue: Online

Event Organizer: https://www.bisnow.com/webinar/national/how-will-industrial-real-estate-evolve-5649

Writer of the Report:

This Report is written by Buildafrique Consulting Group, Kenya multi-disciplinary consultancy, that offers END-TO-END DEVELOPMENT CONSULTANCY, REAL ESTATE, and PROJECT FINANCE solutions through specialized subsidiaries. Among our solutions includes:

1. Feasibility Studies and Market Research.
2. Project Finance and Capital Raising.
3. Project Management.
4. Investment Design Appraisal.
5. Quantity Surveying
6. Construction Cost Consultancy
7. Physical Planning and Planning Permissions
8. Environmental Management and Impact Assessment
9. Real Estate Development and Structured Investment Solutions
10. Property Valuation
11. Marketing and Property Sales Agency
12. Property Management and Facility Management

Our Contacts:

• Office: Navigators, Kindaruma Road, Nairobi.
• Website: buildafrique.com
• Email: [email protected]
• Tel: +254 20 8058493  /  Mobile: +254 722 474285 

Disclaimer:

The information contained in this report is for general information purposes only. While we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information contained on the report for any purpose. Readers are therefore advised in all circumstances to seek the advice of Registered and Licensed professionals in all matters related to Real Estate Investment and Project Development.