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The Current State of the Commercial Properties Leasing Market in Kenya The commercial real property leasing market is a service sector to the economy and its performance is directly and indirectly affected by the prevailing economic, political and social conditionsof the country. A vibrant economy will result in high demand for office spaces and high rental rates and vice versa. The Kenyan economy has been growing steadily in the past three years after several decades of low growth rates. The year 2005 recorded one of the highest growth rates since independence and projections for 2006 suggest that higher growth rates will be achieved. The Central Bank
of Kenya Monthly Economic Review for December 2006 suggests that the economy grew by 6% in the year 2006 compared to the 5.8% already reported for 2005. For a full report click here.
As a result of this wealth of experience and a large portfolio of projects, Regent has acquired an extensive database on a wide range of properties throughout the country and the East African region. It is the access to such a unique property database that enables Regent to analyse market conditions rapidly in order to provide informed forecasts, analysis of trends in supply, demand, prices and rents as well as detailed reports on the myriad aspects of property investment to its various clients.
Regent has had the privilege of managing some of the most prime and prestigious properties in this country. At the moment, Regent manages office spaces of approximately 1.2 millions square feet and 1.0 millions residential units, spread throughout the country and cutting across all social, economical and social strata. These properties have been a true representative of the real estate market and the experience gained has enabled Regent to authoritatively comment on any issue in real estate market. Regent has a complete view and feel of the real estate market.
In addition, Regent has undertaken valuations of various properties for various purposes. The data gathered in preparation of valuation reports and development consultancy has carefully been analysed and stored and is often used in preparing forecasts for various clients. This information has been useful in preparing professional advice for some key corporate clients as follows:
(a) Uganda House, Kampala, Uganda (February 2000)- a major evaluation of a redevelopment proposal and market research for the viability of the project. The proposal was to invest US$30 million (KShs. 2.3 billion) in a mixed use project in central Kampala and involved detailed scenario planning, forecasting and analysis of the prospects for this development proposal. The report was delivered on time and was used as a basis of seeking offshore funding for this development scheme.
(b) Kenya Commercial Bank Limited (2005)- Regent Valuers International (K) Limited was contracted to value all the commercial properties for Kenya Commercial Bank Limited countrywide to establish the Open Market Value and the returns on investment. The exercise involved analysis of past performance of the entire portfolio in comparison to similar properties and a forecast of future performance. The analysis of the various scenarios, both economic and political, was also presented. The report was used to take decision on the properties to retain and those that have been sold out.
(c ) Market Analysis for KPA Bandari Villa (2004)- Regent Group was commissioned to undertake the initial feasibility study to determine the most viable development for the then vacant plots. A detailed analysis of the residential market for Nairobi was presented highlighting past and present trends and a projection of the housing demand, supply and pricing for 10 years. The report was used in 2006 to make investment decision.
The above consultancies have given Regent a strong foundation in market analysis. The amount of historical data in our systems is sufficient enough to forecast the trends in the foreseeable future.
Since the year 2004, Regent has also prepared and published detailed and analytical market analysis reports that have received extensive coverage in local and regional print media. The same reports have become the decision tool for most pension fund managers in investment decisions.
(a) “Kenya Real Property Survey: Commercial Real Property Trends 1990 – 2004 (Nairobi & Mombasa)”- published in January 2005;
(b) “The Current State of the Commercial Properties Leasing Market in Kenya (Nairobi & Mombasa)”- published in February 2006;
(c) “The Current State of the Commercial Properties Leasing Market in Kenya (Nairobi & Mombasa)”- published in January 2007
(d) “The Current State of the Commercial Properties Leasing Market in Kenya (Nairobi )”- To be published in August 2008.
(e) Feasibility Study for Egerton University 2008: (See the abstract on downloads).
(f) Kenya Shell: Real Estate Market Research for Nairobi Central Business District 2008. This was done to identify the going rates for recently sold buildings within the CBD.
The process of collecting and analyzing data for the above market surveys has exposed Regent to the workings of the real estate markets. Regent is now in a strong position to undertake a research for any client to determine the past, present and future state of the real estate market. The understanding of the real estate market is critical to any financial institution as part and parcel of prudent risk management practices.
In addition, members of our professional team have been involved in undertaking research for various purposes. Most of them have prepared research reports/projects/dissertations for degree courses, presented papers at major conferences and written professional articles for newspapers. Our team has the experience and professional ability to undertake a real estate market survey. |
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