That the property market in East Africa has witnessed a boom in
the last few years is without a doubt. What is uncertain in many
peoples’ minds however is whether this is a boom or a bubble.
There are a number of factors that suggest that the boom is real, and here to stay.
In East Africa and in Kenya specifically, the
property market is responding to demand that has been created by the
expanding middle class with disposable income and able to service their
mortgages.
This emerging middle class desires and demands
quality infrastructure- they want well designed properties with great
finishing and in safe and secure locations and they are willing and have
the ability to pay premium prices for their choices.
East Africa’s GDP growth has averaged five per
cent in the last five years and is projected to continue on the growth
trajectory. The multiplier effect has seen investors increasingly
wanting to back this market.
Let me for instance shine the spot light on
Nairobi. The significance of the city as an investment, transport and
financial centre in the greater East African community region cannot be
gainsaid.
The number of multinationals and NGOs that have
either set up their operations or plan to relocate there, in addition to
fast- growing domestic Kenyan businesses, have ensured that Nairobi
continues to attract investments into the commercial office sector.
Actis has two ongoing projects- the second phase
of the Nairobi Business Park and Garden City, the upcoming mixed-used
development scheme along Thika Road both of which are attractive Grade A
buildings.
The recent report titled ‘Hot Spots 2025: Benchmarking the Future Competitiveness of Cities’ by the Economist’s
Economic Intelligence Unit ranked Nairobi fifth out of seven African
cities that made it to a list of 120 most competitive cities in the
world.
This ranking reflects the city’s appeal as a
magnet for capital, businesses, and talent. With Kenya already on the
path towards a devolved government, the demand for residential,
commercial and industrial property can only rise.
To date, investors and governments have been
unable to satisfy the demand and bridge the yawning housing gap; the
housing deficit is estimated to be 100,000 units per year.
The myriad of opportunities in the sector were the topic of discussion at a recent real estate forum in Nairobi.
During the annual event – which was the first ever
GRI forum to be held in Africa, international investors and real estate
developers heard and brainstormed on the potential they see and how to
unlock it, what’s driving the growth and how to make the most of this
market.
Actis has led the way in raising a significant
level of capital for investment in commercial real estate. For instance,
in 2012, we held a final close of $278million for our second fund,
Actis Africa Real Estate 2 fund.
The funds were raised for investment in retail and
office developments in East, West and Southern Africa, excluding South
Africa. In Kenya, part of the funds will be used to finance our newest
investment, Garden City.
It, however, goes without saying that for this industry to
thrive and for the financiers to continue choosing Nairobi as one of
their preferred destinations, the country needs a conducive regulatory
framework and the provision of more incentives that would go a long way
in spurring further growth.
This positive economic outlook and the huge appetite for investment are enough to support a dynamic property industry.
www.sheshegardens.com
Source:
Business Daily Tuesday
August 27, 2013
www.sheshegardens.com
Source:
Business Daily Tuesday
August 27, 2013
