2013 Kenya Real Estate summary. What to expect in 2014.

We are now at the last day of 2013. Several changes took place within the construction and Real Estate world in Kenya during 2013 . 2014 will also follow suit with these changes as Kenya defines itself after 50 years of independence.

1. County government system.

With this new county government system, approval of building plans was rearranged. In Nairobi, the fees chargeable for approval were raised to 1.3% of the estimated cost of construction, valued at kes 30,000 per m2 by the Nairobi County. With this new increase in fees, we hope that the county will improve service delivery and quality in 2014.

2. Introduction of Time Share concept and Real Estate Investment Trusts REITS.

Several developers especially along the coast region have introduced time share concept and fractional ownership concept to the Kenyan real estate.
Others have introduced REITS as a form of investment within the Real estate sector. We expect more and more new players in the time share, fractional ownership and REIT business in 2014.

3. Increased consumption of local building materials.


Slate stone/Mazeras stone has now become quite common within low, middle and high class constructions. Most local bars and restaurants are now using rough uncut Mazeras for flooring. High cost high rise buildings are now using cut Mazeras for driveways and external wall cladding.
A good example is the SAJ ceramics building along Mombasa road.

Also, the driveway at the upmarket May fair building in Upper Hill, has utilised Mazeras.
mayfair centre

Machine cut stone.

Use of machine cut stones from Jua/Thika has grown ten fold. These stones are now being supplied to far flung areas such as Garissa, Meru, Nakuru, Eldoret and Mombasa, all the way from Juja.
A few people are also cutting the stones in Mombasa but they still cant satisfy the high demand.

New cement factories have come up, resulting in a fierce cement price competition. This has resulted in stagnation of cement price from leading band names e.g. Bamburi who are still in the kes 700 per bag range for several years. Newer entrants e.g. Savannah cement have reduced the price to between kes 630 and kes 670 per bag.
With the entrance of Dangote cement in this, we can expect the prices to stagnate through out 2014.

4. New architectural design concepts.

Newer buildings coming up in Kenya are now considering the aesthetic attractiveness.

Competition in real estate has slowly increased such that developers can no longer afford to build simple boxes and go ahead to collect rents/sale that simply. They must now invest in great unique architecture so as to remain competitive. This is the case in South Africa where developers sell the art/beauty of the building as opposed to just a house. By next year, the houses/apartments for sale market will be fiercely fought through design. The times when the developers could sell boxes for houses and make huge profits is slowly coming to an end.

In 2014, the returns on investment for developers who will not consider unique design will dwindle.

5. High rise buildings. Apartment living.

In most developed countries, only the super rich can afford to live in own compound type of houses. The houses for sale around the Nairobi suburbs e.g. Kitengela are bungalow and maisonette types. 2013 has seen fewer bungalow and more maisonette types. Bungalow types will become almost extinct as we usher in 2014. Maisonettes will be fewer. There will be more and more apartment buildings. This is due to the fact that land is constant while the population is increasing, creating huge demand for housing with a constant/limited supply of land.

The pioneers of high rise apartment living, 10 floors and above, are along Hurlingham, Kileleshwa ,Pangani,Parklands and Lavington.

As we usher in 2014, lets all embrace these new changes within the Real Estate industry in Kenya since as Charles Darwin put it, change is a very important aspect to enable growth.

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.Charles Darwin.

Francis Gichuhi Kamau, Architect.

Francis Gichuhi (692 Posts)

Architect Francis Gichuhi . B.Arch. University of Nairobi. Registered Architect, Kenya. Member, Architectural Association of Kenya. Contacts. email info@a4architect.com. Telephone +254721410684


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