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New micro mortgages launched
In a co-operation with roofing solutions provider Mabati Rolling Mills (MRM), Equity Bank Group launched its new micro mortgages product. Equity Bank Group’s entry in the micro mortgage class is expected to radically transform the mortgage-financing subsector while addressing the deficit in low cost housing units.
Salaried individuals and entrepreneurs with a monthly income of at least KES20, 000 can now obtain micro mortgage product designed to facilitate the erection of low cost housing units. The micro mortgage will finance the cost of purchasing pre-fabricated, quality-assured steel frame structures from MRM.
Equity Bank will provide financing to customers wishing to take advantage of the high quality, cost effective and time saving building solution by MRM across its network countrywide.
The new micro mortgages will also carry financing value-add features covering the cost of land purchase and the cost of electricity connection at a fee of KsES35,000 by Kenya Power. Mortgage financing is already Equity Bank’s fastest growing product category.
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Home buyers can now hedge against inflation
Property developers have unveiled a new way of buying houses, which seeks to protect buyers from unexpected price fluctuations, while improving on value of their investment.
The investors have particularly been advised to buy houses through off-plan purchase system, which helps cushion them from price escalations fuelled by inflation and exchange rate volatility, among other economic factors.
Under the off-plan buying system, homebuyers pay a certain percentage of the home price to a developer to reserve the property under construction.
This approach protects them from rising cost of building materials, which has forced developers to constantly adjust their prices making it expensive for potential homebuyers.
While Central Bank has adjusted upwards its benchmark lending rates to commercial banks to control inflation and protect a weak shilling, part of the consequences have been an upward revision in mortgage rates. The changes in these rates has forced leading banks to also review up their mortgage rates.
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Centum plans more real estate projects
According to Chief Executive, James Mworia, Kenya’s Centum Investment will raise funds to finance real estate projects by selling out of two companies for some $21.7 million and by raising debt on international markets.
Ranked the largest quoted investment company in East Africa, Centum has diversified its portfolio from blue chip stocks to the booming real estate sector which is seen as an attractive asset class due to the soaring housing demand.
Mr. Mworia did not disclose the names of the two firms but said the estimated cost of the first phase of construction on the 100 acres in the Runda suburb of Nairobi would require about 6 billion shillings.
Centum also has 300 acres in Uganda and plans to construct integrated developments with residential, commercial and recreational amenities.
Cross-listings in Rwanda and Tanzania are at advanced stages, in line with the firm’s geographical diversification strategy.
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Investor to build estates worth Kshs 7b
Nairobi’s property market recently attracted a fresh KSh7 billion investment that is also expected to change the way Kenyans have traditionally built residential houses.
The development, to be located along Thika Highway near the Kasarani Sports Complex, will give Kenya one of its tallest residential apartments of up to 18 floors.
The 41-acre estate will consist of 2,500 units with the capacity to accommodate 8,000 people and is mainly targeted at the lower segment of the middle class.
Residents will also enjoy the services of commercial outlets and shared social services such as recreation centers.
The projects sponsors, the Kasarani Hills Consortium, said that work on the project that is expected to significantly bring down the cost of residential apartments in the South western part of Nairobi will begin as soon as the group gets the necessary approvals from environmental authorities.
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MRM ventures into low-cost homes
Mabati Rolling Mills recently entered the lower-end housing market by offering prefabricated housing as it races to tap this growing segment of Kenya’s real estate, which investors targeting quick returns have shunned.
The manufacturer of roofing materials is seeking a piece of the property market from selling ready-made steel houses that will retail at KSh80,000 and KSh160,000 for two and four-room homes respectively. It is hoped that the pricing will help to penetrate the low-end of the market which investors have neglected as they target the lucrative middle and upper-end of the market.
Mabati Rolling Mills is a subsidiary of the Safal Group, manufacturer of flat and long steel products.
Already, the MRM has opened satellite offices in Kisumu, Mombasa and Eldoret with a bid to spread the housing project outside Nairobi.
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Kenya Railways opens idle land for cheap homes
Kenya Railways and National Housing Corporation have entered into a joint venture that will see the rail firm open its land for construction of affordable homes in urban areas. The rail company has 320 acres of land surrounding the rail stations in Nairobi, Kisumu and Mombasa which currently lies idle. Under the joint venture, Kenya Railways will provide the land and part financing, and earn annual leases. NHC say the deal will allow it to increase the supply of affordable homes will help cool the run-away prices.
Already, the two State companies have sealed a deal involving a prime land owned by Kenya Railways in the upmarket Kileleshwa area where they will construct apartments that will sell at Sh8 million each compared to market rates of KSh.10 million. The firm is targeting to raise about KSh.1 billion annually in land leases and use the money to develop new rail infrastructure.
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Kenyan Bank enters Uganda’s mortgage industry
The Kenya Commercial Bank (KCB) has come up with a competitive mortgage financing product, to address the ever increasing demand for mortgage facilities in Uganda.
It comes at a time when the bank is undergoing a consolidation process to increase their product range and also improve service delivery mechanism in order to tap into the large real estate sector. In Uganda, there are several opportunities in the construction of residential and commercial properties, as demand for housing units continues to rise. Even the cost of building materials and all inputs in the construction sector continues to rise. Development of residential homes, estates and commercial offices continue to grow rapidly driven by an increasing middle class operating in an improved and expanding economy. KCB mortgage products will include the owner- occupier mortgage, construction finance for residential, commercial property finance, the Diaspora mortgage, group schemes, as well as the equity release.
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