Real Estate Investor Magazine South Africa April 2015

AFRICA The Kenyan Property Market at a Glance BY ILSE FRENCH K enya has a strategic location in East Africa, and many companies expanding in this region are considering it as a market entry point. Residential sector Kenya’s gowing middle class has led to an increase in demand for residential properties, and the speed of urban population growth currently exceeds the rate of development of new houses. Kenya’s state-run National Housing Corporation estimates the current housing shortage at 2 million units. Current production of new houses is estimated at 30 000 units per year. Kenya’s government is looking to the private sector to address the housing deficit and in 2012, the “The outlook for the retail sector is strong.” government introduced new regulations allowing PPPs to be used to develop new housing projects. Three PPP housing projects for public servants totalling 76 000 units are currently in the development pipeline. In the private residential market, urban developers are adopting a ‘high density’ approach to scheme design – such as apartments – and a bigger plot ratio to make optimal use of available land. Retail sector The outlook for the retail sector is strong. Kenya is seen as an ideal point of entry for launching retail outlets and consumer goods distribution into East and Central Africa. The improved infrastructure facilitates for the movement of goods means a wider variety is available at lower prices. Kenya has a growing local market with a consumer base whose wealth is increasing. Only about 16.8% of the population falls into the middle class, but this is growing fast. Kenya’s ‘Vision 2030’ includes plans to improve the 60 April 2015 SA Real Estate Investor efficiency of the retail market and further increase investment opportunities. Malls are already surpassing office space in profitability. Foreigners seeking a foothold in the market are concerned about several barriers. Regional trade policies work against foreign retailers that seek to rely on i \ܝˈ

Real Estate Investor Magazine South Africa April 2015 | Page 62