Developer eyes post Covid-19 pandemic opportunities
Writer BARRY SILAH talks to BONKE OMWAYI, Step-Villas Real Estate Consultants Managing Director on the direction of the sector after the pandemic.
What is your assessment of the post Covid-19 status in the real estate sector?
The property market will go up by 90 per cent after the pandemic ends. Housing is an essential need for people and one of the backbones of the economy.
Demand for rental spaces are bound to increase and landlords may increase rents.
More building could come up post Covid-19 and we expect a rush against time in real estate acquisitions and developments to compensate for lost opportunities during the partial lockdown
What new concepts are developers persuing?
Developing the middle class concepts. For example, we have the Waiyaki Way Ridge Apartments, a 247-units of one and two-bedroomed each going for Sh10 million.
Such apartments are affordable to Kenyans looking for homes in urban and peri-urban settings at reasonable prices. The Property Index so much depends on the middle class.
How viable is the smart housing concept in countries like Kenya?
Smart housing is not so viable among low-income areas due the cost implications.
This is basically for the moneyed few, therefore it is a distinct and target-specific model. Still, it is picking up and for those who value space and modern homing intelligence.
Will Step Villas Real Estate venture to satellite towns in future?
Yes, we are carrying our various feasibility studies on various satellite towns with an objective of creating the same value for our clients as we have in Nairobi.
We are looking forward to working with the various county governments. As you know, each county government has a town development plan and we plan to cooperate with them for the various developments we would be involved in.
Public Private Sector engagement options may also be considered. For example, Nairobi, has a master plan of each residential estate— what to build, how to build and where to build.
If other counties adopt such, it can make it easier for investors to plan projects.
Do we foresee Treasury relaxing taxes in building and construction in the wake of Covid-19 pandemic?
President Uhuru’s Covid-19, Eight Point Economic Stimulus programme came up with various funding and taxation regime component with objective of jump starting the economy.
The first point was on infrastructure and the State intends to rehabilitate access, urban and peri-urban roads.
So, the government has the will to support real estate developments. VAT tax was eased from 16 per cent to 14 per cent— a huge saving in multimillion shilling building projects.
However, Treasury has not been clear on waiving taxes to landlords. We have witnessed tenants being evicted during the Covid-19 period, families sleeping in the cold due to non-payment of rents.
If the government would waive or completely remove the various rates being paid by landlords, or find ways to liaise with banking institutions to lower and/or extend interest on mortgages, this would do a lot of good to the developers.
Is the mall concept sustainable in small shopping centres?
Malls do not have space in real estate currently. In fact, the government should come up with regulations to rally developers against mall developments.
Without such guidelines, malls have come up at every street corner, which has diluted their values.
Such malls make estates insecure, as residents are not able to control the traffic of people within the neighbourhood.
Some structural designs are also questionable and leave a lot to be desired.
What is your view on the digitalisation of the Land Registry?
Digitalisation of the registry has made land registration process convenient, but not transparent.
This is due to the risks of Internet fraud and outsiders colluding with internal staff to meddle with the systems.
The government should also enhance security in the land registry computer loggings and financial transaction. All over the world, Internet fraud exists and we are not an exception.
Is the property market flooded?
The property market is not flooded. Having a house is a basic need and there are so many people who still do not have homes. So many.
That is why I urge fellow developers to liaise with the national government bodies and various county govenments to build more house for the citizens.
Housing is one of the Big 4 Agenda in the President’s focus. What we need are affordable housing, and this is only possible when county and national government enable public private engagements on the housing policies and taxation regime.