Kenya's real estate sector forecasted to bounce back in 2018

Kenya’s real estate is expected to bounce back in 2018 following the conclusion of last year’s election cycle which spooked developers, a hopeful review of the interest rate cap among other developments, according to the East Africa Property Investment (EAPI).

“Kenya is once again at the top of investors and developers lists of attractive investment destinations. We’re hearing a lot of positive news from our stakeholders, and we expect some eye-catching announcements at EAPI in April.” Said EAPI Summit’s managing director Kfir Rusin.

According to Rusin, the resuscitation of the property sector will be driven by President Kenyatta’s multi-trillion shilling affordable homes programme, a hopeful review of the interest rate cap and a return to political certainty following the conclusion of last year’s election cycle which spooked developers, investors and home buyers.

The projected gross domestic product (GDP) growth rate of 5.8 per cent by the World Bank in January certainly aids to the increased investor confidence and appetite in the market.

“We’ve hosted our event for four years in Nairobi, and our stakeholders, which are Africa’s biggest names in development and investment are energised by these fundamentals, and also the state’s proactive approach in driving the sector forward is fuelling appetite,” he added

Rusin's optimism is supported by Broll Property Group's research team’s recent briefing to EAPI organiser’s, API Events, on the region.

"East Africa continues to remain attractive due to increasing urbanisation and consumerism, private equity investment, the maturing state of the market, as well as ongoing infrastructure improvements."

Over the past several years, the East’s property markets, Kenya in particular, have become a lightning rod for investment as both local and foreign investors have looked to diversify their investments across multiple market segments from retail, industrial, housing and office space have been attractive investments.

The market was pummelled by last year’s political uncertainty which resulted in a six-year low with numerous investors and developers employing a ‘wait and see’ approach which led to an 18.4 per cent reduction in approved new buildings in 2017 compared to 2016, Kenyan National Bureau of Statistics

As overall market sentiment continues to improve, EAPI is confident that the real estate sector will recover its lustre in Kenya, which will translate to its regional partners.

“We’re already seeing the signs of a rebounding market with the inception of multi-billion Kenyan shilling funds targeting mixed-use developments, as well as global equity firms investing in developers in Kenya. While Ethiopia and Tanzania’s economies continue to thrive, we still see greater value from a real estate perspective in Kenya’s more diversified and established economy.”

The new developments and positive energy displayed by the industry and its public-sector stakeholders bodes well for the EAPI Summit on the 24th and 25th of April in Nairobi.

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