MIP WEEKLY CONSTRUCTION INDUSTRY REPORT NO.34
PERIOD: APRIL 11 to 17, 2016
Mombasa tycoon building sh 1.5bn residential block in Westlands
11/04/2016 : The Business daily, Page 19
- The owner of Best western Plus Creek side hotel in Mombasa is putting up a luxurious residential block in Westlands with top – floor duplexes priced at Ksh 28 million each.
- Business man Amjad Rahim is building an 18 storey structure with 240 apartments scheduled to be completed in mid-2018 and featuring a convenient store, café, conference rooms, spa, indoor games and residences.
- The Ksh 1.5 Billion project, dubbed SkyNest, targets high end home buyers seeking comfy residences surrounded by amenities such as hotels, office suites and malls located at the heart of a bursting urban centre.
- He target market is the urban family who wishes to reside in the most happening and convenient location in Nairobi.
- Skynest sits on a one acre plot located on Mkungu close, opposite the Sarit centre roundabout in Westlands.Read More
Cytonn In Ksh 3 billion deal with chinese firm
12/04/2016 :The People Daily, Page 16.
- Cytonn real estate has patnered with China National Aero Technology International Engineering Corporation (Catic) on a 3 Billion project development in Ruaka, on the outskirts of Nairobi. The chinese firm is known for constructing ultra-Modern buildings in Nairobi such as the upcoming Two Rivers mall, Old Mutual – UAP towers, Jomo Kenyatta International Airport Terminal and residential projects such as Karen Bogani Villas.
Blooming malls entice retailers despite glut fears
12/04/2016 : The Business Daily, Page 12
- With over 400,000 sqm of space to come under shopping malls in Nairobi within the year, anxitety is building over whether the demand can match up.
- Market analys are edgy as to whether real estate, Nairobi’s most lucrative growth sector that has prompted construction of huge malls may be headed for a glut.
- Last week, during the East African Property Investment Summit, Britam Asset managers said that to consolidate profits, its time construction of malls in the city is brought to a halt.
- James Hoddell, the CEO of Mentor management Ltd, said the current anxiety is not necessarily due to oversupply, but tough market conditions for businesses.
- He also added that some areas might be underserved.
- Knight Frank said some areas of the city remain underserved and the swelling middle class with rising incomes present an opportunity for growth.
Chinese to build Ksh 1.8bn serviced units in Kilimani
14/04/2016 : The Standard, Home and Away, Page 2
- Chinese investors yesterday launched a ksh 11.8 billion serviced apartments project in Kilimani, Nairobi, to tap into the growing number of business travelers and tourists.
- The 11 storey Soho Apartments will be on Kirichua Road. A consultant for the project Nathan Luesby said the building targets non-government organization, embassy and multinational workers visiting Kenya for short periods of between 3 to 12 months.
- In the Soho market Analysis Report notes that Nairobi’s Kilimani area will have 252 newly built serviced apartments this year with Ole Odume Road, near Adams Arcade, having the highest concentration of developments that feature a gym, swimming pool, restaurant, sauna and spa, a conference room and a bar.
Kenya Could Import ”Fundis” in the future
14/04/2016 : The Standard, Home and Away , Page 2
- An alarm has been sounded against the looming shortage of fundis following the conversion of technical training colleges to universities.
- Colleges are now offering white collar courses at the expense of skilled training, creating gaps which have now become all too common in the construction industry. Read more.
Real estate is the best investment option
14/04/2016 : The Standard,Home and Away, Page 2
- The Cytonn investment 2016 outlook report cites the property market as the best investment option this year. It says local and foreign investors will continue to reap returns since growth of the middle class and continued urbanization creates a growing demand for both residential and commercial developments, even though politics will play a major role in determining returns from other sectors. Read more
Ksh 3 billion Project breaks ground in Kiambu.
14/04/2016 : The standard, Home and away, Page 3
- Cytonn investments this week broke ground for its second real estate project, a Sh 3 billion ambitious development in Ruaka, Kiambu. Set on a four acre parcel of land, the project dubbed the Alma is expected to be a comprehensive lifestyle development encompassing 408 modern apartments, with one, two and three bedroom apartment options.
- It will also have a commercial facility, a lifestyle clubhouse and an elevated playground for children and ample parking facility.
- The development targets a capital appreciation of 23% per year during the development period, which is estimated to be two and a half years.Read more
Oversupply leads to slow growth in office rents
14/04/2016 : Daily Nation, DN2, Page 46
- The cost of renting office space in Nairobi increased at a slower pace last year due to an oversupply.
- A report by real estate firm Mentor management limited shows that office space rents rose by 7% last year, compared with 13% in 2014.
- It adds that about two million square feet of new office space were added in 2015, compared with 1.7 million in the previous year.
- Nairobi has seen a huge growth in office space over the last several years as landlords are forced to adjust their expectations to achieve tenancies.
- A record 3.8 million square feet of office space is anticipated to come to stream in 2016.
Mitsumi opens mid-level hotel in Westlands
14/04/2016 : Daily Nation, DN2, Page 45
- Electronics distribution firm Mitsumi has opened a 94 room mid-level hotel in westlands in which it invested about 2.5 Billion
- The hotel named Golden Tulip will be run by the Louvre hotels group. Nairobi has been identified as a regional hub for business travellers with international and local names in hospitality industry jostling for property around the airport area as well as the Central business district and its periphery, including westlands and Upper hill.
- The Golden Tulip is the latest string of hotels opening or under construction in westlands.
- JW Marriot is set to operate a hotel being built by Chinese firm AVIC from 2020.
- Tune Hotels is also set to open its doors in westlands in June. Read more
Kenya’s 23rd Homes Expo
17/04/2016 : Cytonn Weekly Report No. 15
- Kenya’s 23rd Homes Expo themed ‘Creating Tomorrow’s Lifestyles’ was held this week at the KICC, Nairobi.
- The event, which attracts more than 30,000 visitors, provides a one-stop shop for aspiring home-owners as new products, innovative designs, technology and different financing options are showcased.
- Kenya’s housing market is thriving on the back of strong economic growth and a burgeoning middle class ready to invest in new homes. While adoption of new building technologies is still low, we expect an increased uptake as the market is enlightened through such events. Read more
Chinese investors to put up serviced apartments
- Nairobi continues to be a regional business hub for East Africa, and is one of the global cities well positioned to gain from the growing popularity of short-let accommodation.
- The Knight Frank Global Cities Report 2016 indicates that multi-nationals are more cost-conscious and deploying people for shorter periods, thus relying more on serviced apartments than hotels. The most sought accommodation locations are in Kilimani, Upperhill and Westlands.
- The Cytonn shows that serviced apartments in Westlands have a high occupancy of up to 90% generating a yield of up to 8.7% annually, compared to serviced apartments in Kilimani which have an average yield of 7.0%.
- The main factors driving demand for serviced apartments in these areas include proximity to Nairobi CBD, proximity to major office nodes, good transport network, security and proximity to shopping centres and social amenities
- The influx of serviced apartments may set back hotels, especially those heavily relying on business travellers. This is because these apartments provide a guest with amenities similar to those of a hotel such as house-keeping, conference space and restaurants while still providing the comfort of a furnished home. In order to keep up, hotels, such as the Ole Sereni Hotel on Mombasa Road, are diversifying their offerings by incorporating a rental option through building of serviced apartments thus giving visitors a wide array of accommodation options.Read more
Swiss International makes entry into Kenyan hospitality industry
- Mount Kenya Holiday Homes signed an agreement with Swiss International for the development and management of a 75 suite 5-star hotel in Naromoru. The entry of the global hoteliers into the Kenyan hospitality market, under a Kshs 70.0 bn worth of partnership, is on the back of the scenic foothills of Mt Kenya and the surrounding wildlife sites in Nanyuki, Nyeri, Isiolo and Samburu. The resort whose construction began 4 years ago and comprises of a total of 281 villas, apartments, townhouses and the 5-star hotel, has now acquired a new brand name ‘Swiss International Resort Mt Kenya’.
- Entry of the globally renowned hotelier into the Kenyan industry shows confidence in the country as a local and international tourist destination. A report recently released by W Hospitality ranked Kenya as the best country in East Africa and 7th in Africa in the field of hospitality. Improved security in Kenya, followed by lifting of travel advisories has led to a recovery in the number of tourists visiting Kenya, thus creating demand for hotel rooms.
- This data indicates that despite the setback brought about by insecurity and terrorist attacks in 2014 and 2015, Kenya remains resilient and has potential for further growth. The government’s commitment to improve tourism through enhanced security and expanding airport infrastructure will increase the number of visitors to Kenya and thus boost hotels development. Read more