Real Estate
Real Estate has been proven to be one of the most profitable investment opportunities currently available in Kenya with relatively low variability of returns. It involves the purchase, ownership, management, rental and/or sale of real estate for profit. How-ever, investors must be aware of the relatively long tenure of holding period that may be required. The location of such an investment usually has an important impact on the holding period required for a rewarding transaction. There are three major types of real estate namely:
The Commercial Real Estate
These properties are used solely for business purposes and an investor (developer) usually owns the building and collects rent from each business that operates within the structure. Sometimes, the developer could build for outright sale and subsequently appoint a facility manager. Some of the major categories of commercial real estate include:
· Ultra-modern malls and event centers
· Office buildings
· Recreational Centers
· Concessions including Roads, bridges, Free Trade Zones and ports
· Hospitality
· Restaurants & Fast-Food Outlets
We estimate that 60% of global investment in real estate is in commercial real estate.
The Residential Real Estate
This type of properties is meant for living purposes. Shelter, it is said, ranks second in the hierarchy of human needs; being most important after food. Available statistics show that majority of the total household population in Kenya lives in rented apartments. This fact, no doubt, makes Kenya a viable investment destination for local and foreign investors, given the mammoth size of her population
Industrial Real Estate
These properties are used for manufacturing and production. Usually involves the construction of warehouses and factory floors. This sector of the industry is not so robust in Kenya, due to the current low level of manufacturing activities in the country.
Overview Of the Kenya Real Estate Market
In the past year, private equity firms have taken Africa’s real estate market by storm with millions of dollars in investments, especially in the commercial and hospitality sectors.
The growing interest in the Kenyan market is as a result of huge demand buoyed by increasing urban population and changing shopping culture among the expanding middle class, which has resulted in the construction of numerous shopping malls.
Growth in the sector has also been enhanced by the entrance and expansion of new and existing multinational companies in sectors such as ICT, oil and gas, retail merchandizing and finance. Discerning developers have focused on the construction of high-end residential houses, commercial developments as effective demand has been strongest for these groups of developments. There has also been an encouraging increase in the construction of flats and condominium –type house, to aid affordability.
Outlook
The Kenyan market remains attractive as there are numerous opportunities available in the sector. There are opportunities for both institutional investors and real estate developers. We have identified viable opportunities in the following segments of the market for the immediate term:
· Hospitality;
· Shopping malls; and
· Office blocks
· Serviced flats
However, the challenge faced by the industry in terms of high and unfavorable interest rates is expected to persist in the short term. Hence, transactions must be critically reviewed prior to commencement. Nonetheless, the current recovery trend in economic factors is expected to continue, hence which may result in a downward pres-sure in lending rates.
If you are looking for a good residential, industrial or commercial plot for sale, we are selling 50 by 100 plots in Kitengela, Ruai, Mai Mahiu, Kisaju, Isinya, Makuno Mwea and Ol-Kalou Nyandarua. Call or WhatsApp +254 791 789 833 for site inspection.
