Developers Largely Focusing on Low Cost Housing

There continues to be a lot of interest in housing for the low to medium income given the huge opportunity in the market. Last week, a local real estate development firm, Peninsula, announced that it will be undertaking a Kshs 400 mn low cost housing project in Mlolongo. The project’s target group comprises of low and middle-income earners, and more specifically, first time homebuyers. Peninsula is undertaking the project through joint ventures with landowners and is being financed by the Cooperative Bank of Kenya. The development will include studio, 1 and 2 bedroom apartment units, with selling prices ranging from Kshs 1.5 mn to Kshs 4 mn.

Other developers like Karibu Homes and Rogam Properties are also undertaking similar projects in the area. Developers and financiers alike have for a long time leaned towards developing high-end residential properties. However, this is gradually changing given the high-end residential property market in Nairobi has been showing indication of nearing saturation, based on decreasing occupancy rates. Our expectation is that low cost housing developments will be on the rise and will be concentrated in satellite towns where land is readily available and is significantly cheaper as compared to the Nairobi area.

Safaricom Partners With Developers To Offer Internet In Office Buildings

Also this week, Safaricom launched Jiji Smart, an initiative that will see the telecommunications company partner with real estate developers in a bid to create new internet ready business premises. Under the initiative, Safaricom will provide fiber and other internet infrastructure while the developers will only pay for the internet bandwidth. Safaricom has already signed a seven year contract with the Hub, which is an upcoming mixed use complex in Karen scheduled to open in November this year. For Safaricom, the end goal of the initiative is most likely to command a larger share of the country’s growing broadband market. However, the trickle-down effect of the initiative for the real estate industry is a positive contribution towards the development of smart buildings. We expect that demand for office space in such buildings will be high since users will spend less money and time in getting their premises ready for operation.