Frequently Asked Questions

Quantity surveying and Land Surveying are two different professions in the Built Industry.

A Quantity Surveyor in Kenya is involved in building construction. The Quantity Surveyor advices and manages the building costs. Additionally, the Quantity Surveyor appraises the contractual procedures in a development project.

A Land Surveyor in Kenya on the other hand is involved in land-use management. Here, the Land Surveyor measures and manages the physical land for specific development requirements. These include assisting builders in positioning buildings and services infrastructure on the land parcel and subdividing the land parcel. The Land Surveyor also establishes crucial natural and man-made features on the physical land. This is done for use in project and infrastructure design.

Property management in Kenya refers to the day-to-day tasks involved in managing the life cycle of real estate property. This is done for purpose of enhancing and maintaining the value of the property. These would include tasks such as repairs and maintenance. Other areas include rental management, property risks management, and maintaining the occupancy of the building.

On the other hand, Facility management in Kenya is an interdisciplinary field within property management. This entails the management of the business’s common building services for the users who either own or lease the investor’s property. Facility Management is aimed at supporting the business unit operations, as well as making the building as productive as possible to the users.

The idea about the two differences is to separate the space and content of the property from the day to day work of the building users.

Equity Financing in Kenya is a form of raising capital for an investment project. This is done by offering a portion or shares of the project or investment to an investor to raise capital. Equity and debt financing are the most common forms of funding a real estate investment purpose.

Senior Debt Financing is a form of Debt that takes priority over other unsecured or more “junior” debt. This comes when a Real Estate developer owes an Institutional Leader for a real estate investment undertaking. Senior Debt is therefore the first level of Developer’s liabilities. This means which means it must be repaid first ahead of all creditors. Senior Debt is secured by a real estate developer for a set interest rate and time period. The real estate developer provides regular principal and interest repayments to lenders based on preset schedules.

Contractor’s Debt Finance in Kenya is a form of Mezzanine debt financing provided by a Development Contractor. This is done to fill the gap between Senior Debt and Equity financing in projects. This arrangement usually applies whereby the contractor serves a role of financier or investor in a project. The Contractor’s Debt finance is in many occasions converted into equity for recovered through shares capital.

Joint Venture in Kenya Real Estate is a real estate business arrangement in which two or more parties agree to pool their real estate resources together. This done for the purpose of accomplishing the project investment objectives of gaining a return on investment from their individual resource contribution into the project. The resources may include land, finance, or technical expertise. JV can take any legal structure through a Special Purpose Vehicle. The legal structures can be Corporation, Partnership, Limited liability companies and other business entities..

Finance Deficit is the amount of money by which an investment project fall short of the budget cost. This is the express finance interest that a Real Estate Developer seeks from an Investor or a Financier.

Capital structure is how a Real Estate business venture or a Project Sponsor finances its overall Project Cost plan. Capital structure incorporate various and several sources of funds. The sources of funds can range from debt, private equity, or working capital.

Owner’s Equity represents the Owner’s or Sponsor’s investment in a Real Estate business venture, minus the amount of liabilities.

IRR stands for Internal Rate of Return. It is an investment performance measure used in commercial real estate to measure the potential or profitability of a particular real estate investment. IRR is expressed in percentage rate earned on each shilling or dollar invested for each period in a particular Investment venture. The use of IRR as a performance measure in Real Estate Investment is to give an investor the means to compare alternative investments.

Anyone considering investing in Real Estate or buying a Real Estate Property must be interested in what return the property will give them. In other words, he or she must be interested in Yield. A yield is a measurement of income return on an investment. It is generally calculated as an annual percentage rate, based on the asset (or investment) cost or market value. Yield is an important way of measuring the future income on an investment. This is because the return you get now and in the future is a key factor in working out whether to invest in a particular investment or not.

These two terms are often used to describe performance of a real estate investment over a set period of time (normally a year). However, Return and Yield are not one at the same time. Return expresses what an investor has actually earned on an investment as a percentage increase over a certain period in the past. This includes interests and related capital gains. Return can therefore be called retrospective or what has been earned in the past. On the other hand, Yield is prospective and forward-looking. It is the income return on an investment that measures the income that an investment earns. Yield is based on initial cost but ignores capital gains.