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KCB signs up for mortgage refinancing firm

KCB Bank Kenya has formally signed up for the Kenya Mortgage Refinance Company (KMRC), a non-deposit taking entity meant to drive affordable mortgages in Kenya.

KMRC, a private-public investment, majority owned by the private sector (80%) and the balance (20%) held by the government was launched on Wednesday by President Uhuru Kenyatta in Nairobi.

KCB is one of the main shareholders of the company whose main role is to provide long term funding to primary mortgage lenders (banks, MFIs and Saccos) to increase availability and affordability of mortgage loans. Currently, the private shareholders are eight commercial banks, 11 deposit-taking Saccos and one microfinance institution.

KCB Group Chief Operating Officer Samuel Makome will sit as a member of the KMRC board which was unveiled at the event that was also attended by the Group CEO and MD Joshua Oigara.

The KMRC initiative sits well within KCB focus of driving the growth of the housing sector in Kenya. As a market leader, KCB has been keen to get into partnerships with both private and public sectors in an effort to further grow the housing industry that is at the centre of Kenya’s economic transformation.

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Source: Business Today

 

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Real estate firms move to Kilifi due to affordable land

Investors and real estate developers are trooping to Kilifi County to buy and construct houses.

The newfound interest in the county has seen affordable homes coming up targeting middle-class citizens.

The reason investors prefer Kilifi to other counties such as Mombasa has to do with cost of land.

The other reason investors have given for eyeing Kilifi as an investment destination is availability of raw materials for construction.

They also see Mombasa as a congested city.

My Space Property chief executive officer Mwenda Thuranira says investors and buyers are rushing to Kilifi due to the affordable cost of land.

“Generally, land in Kilifi County is cheaper than in Mombasa. What is offered here in Mombasa for an acre is double that in Kilifi. Construction is easier here because stones come from areas in Kilifi while sand used for construction is found in Malindi,” he said.

He said a beach plot in Kilifi goes for Sh40 million an acre, while the same size of land in Nyali is sold at Sh100 million.

High demand

Mr Thuranira predicts that land in Kilifi will soon drastically appreciate as the town is on its way to becoming a major residential area for Mombasa people.

“It is just like Nairobi, where everyone is moving away from the city to Karen and Kiambu. Kilifi will now be the bedroom of Mombasa. Due to the high demand, we definitely expect the cost of land to rise sharply,” said Mr Thuranira.

Tourism players have argued that Mombasa is a small county, and it is normal for investors and proprietors to move to neighbouring towns.

Kenya Tourism Federation Chairman Mohammed Hersi says Mombasa Island is densely populated, while the cost of land keeps on rising.

“Mombasa is a small county, therefore we definitely expect it to grow northwards or southwards, which is happening now. Land is a limited factor of production, plus the cost of land is very high,” he said in an interview.

“This is beneficial to the county because right now Mtwapa has become a cosmopolitan place, where 80 per cent of property is owned by women,” he added.

Mr Hersi says the development in Kilifi and the surrounding areas will not only be beneficial to the specific areas, but also to the Coast region.

“There will be no problem if tourists stay in Malindi or Kilifi. This has been happening for a long time and it benefits the Coast region and the country at large. Mombasa also boasts of beaches such as Nyali, Jomo Kenyatta and Shelly.

“There is no way our tourism is going to be affected if investors move out of the county,” said Mr Hersi.

Small island

He added that Mombasa, being a small island, does not have room for the kind of growth that is possible in areas like Kikambala in Kilifi.

This trend has led to huge developments such as the Vipingo Investment Park, an initiative by Centum Investment.

“People now want to keep their cattle, have a small farm and have poultry in the same compound, which is not possible in the city,” explained Mr Thuranira.

Mr Joseph Mbugua, the Inuka Afrika Properties Ltd executive director, says demand for affordable commercial and residential facilities is rapidly growing in the counties.

Mr Mbugua says Inuka Afrika Properties Ltd has so far undertaken 50 projects and issued 1,000 tittle deeds to new land owners.

“They only need to pay 50 per cent of the land value and pay the rest in instalments in three to six months period. But beware of land grabbers and land cartels in Mombasa, Kilifi and Kwale counties,” he said.

The firm is now involved in projects that include the 10 acres Inuka Homes at Msabaha in Malindi.

Others are Chakama Gardens, Inuka Gardens, Inuka Mtwapa Gardens and Bofa Gardens in Kilifi.

Under these projects, a 70 by 100 metres’ plot goes for between Sh300,000 and Sh950,000.

Many foreigners, especially Italians, have made Malindi their second home.

Source: Business Daily Africa

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1.5 percent housing levy pay cut for workers to start March

Formally employed workers could start paying a 1.5 percent salary deduction beginning March 1 to finance construction of cheap houses by the State.

Transport, Housing and Infrastructure Cabinet Secretary James Macharia Tuesday said the government has reached an agreement with the workers’ union, which will pave the way for an end to court injunctions that had stopped the deduction.

“We had injunctions that halted the process, but the parties have agreed to withdraw them so we are ready to proceed with the project,” said Mr Macharia in Nyeri during an inspection of ongoing public projects in the county.

Employment and Labour Relations Court Judge Hellen Wasilwa had granted the order to halt the deductions following an urgent application by the workers’ umbrella body, the Central Organisation of Trade Unions (Cotu) in December.

Cotu secretary-general Francis Atwoli had faulted the tax, saying there was no public consultation before its implementation.

The levy is to be deducted from each employee’s basic salary and remitted to the National Housing Development Fund (NHDF).

Violating orders

Cotu has, however, not made public its position on the matter.

An application filed by the Ministry of Housing asking the court to lift the injunction against the deduction comes at a time when Cotu wants Housing principal secretary Charles Hinga to be found in contempt of violating the very same orders.

Cotu argues that despite knowledge of the order, the PS proceeded to place an advertisement in the local dailies on December 24, inviting certain organisations to forward the names of their nominees to be considered for appointment to the Housing Fund Advisory Board.

Cotu, through lawyer Philip Omoiti, argues that failure to carry out the orders as directed was in total disregard and disobedience of court, and that the union is aggrieved by such disobedience by the PS.

“Good order and the rule of law demands that a court order is obeyed,” argues Mr Omoiti.

Separately, the Federation of Kenya Employers (FKE) has also obtained orders stopping the same ministry from proceeding with the planned appointment of members to the Housing Fund Advisory Board.

The case will be heard on February 26.

According to Mr Macharia, construction of the housing units should begin in a few weeks after the start of the March 1 deductions.

“The project is now clear and will be launched in a few weeks. The first 2,000 units will be constructed in Park Road in Nairobi,” he said.

Mr Macharia said that those who do not benefit from the housing project will get their money back at retirement.

Sh57bn a year

“Those who do not get a house or already have one will get their money back when they retire. The only money that will not be refunded is the employers’ deduction,” he said.

The 1.5 percent levy on salaries is expected to generate about Sh57 billion a year, from about 2.5 million salaried Kenyans, with additional revenue expected to come from voluntary contributors.

Although the initial plans projected the construction of half a million houses, Mr Macharia said that local and international developers have expressed interest in putting up to one million units. It is estimated the project will to cost up to Sh1.5 trillion.

“Actually one investor has expressed interest to fund 100,000 units. The project is no longer a vision, but a reality,” Mr Macharia said.

The government intends to spread the project to other regions including Nyeri, which will get 2,000 units.

Source: Business Daily

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HFDI lauds tax break, offers incentives for new home buyers

Real estate developer says the relief, coupled with the government’s plan to improve housing infrastructure, will lessen the burden for first-time homeowners

HFDI, the property development subsidiary of HF Group, has lauded the move by the Government to provide tax relief for Kenyans buying houses under the Affordable Housing Scheme, saying the move was timely

Commenting on the move, HFDI Executive Director James Karanja said the relief, coupled with the government’s plan to improve housing infrastructure, will lessen the burden for first-time homeowners.

“Many factors contribute to high cost of properties including the cost of funding such housing projects but one factor that has kept the prices of housing high is the stamp duty and the tax relief offer is welcome to the sector,” Karanja said.

Karanja was speaking ahead of the handover ceremony for the home buyers and open day for the Group’s Komarock Heights Phase 1 scheduled to take place on 10th August.

Komarock Heights is a modern development comprising 1272 beautifully designed apartments nestled within Komarock Estate, the development will be implemented in three phases.

Komarock Phase 1 comprises 480 residential apartments with a mix of two and three bedroom apartments in 20 blocks featuring separate dining area, en-suite master bedroom, common shower and separate WC, dhobi areas with enclosed gas cylinder chambers, lifts to all floors, solar water provision to every unit to allow homeowners to use sustainable energy for heating their water, handicap accessible units, backup water supply from a borehole, gated children’s playground, and a shopping mall.

“We will be offering a tenant purchase option for new buyers as an incentive to acquire a home in this development,” said Karanja.

Other projects completed by HF Group include Komarock 5A featuring 162 units, Komarock 5B featuring 115 units, K-Mall covering 12,000 square meters, Kahawa Downs featuring 235 units, and Precious Gardens Phase 1 featuring 165 units.

Projects nearing completion include the 248 units Richland Pointe Phase 1 scheduled to be completed by December 2018, the 152 Units Precious Gardens Phase 2 expected to be complete by June 2019, and the 240 units Clay City Phase 1A expected to be ready by January 2020.

Plans are underway to develop 5,000 units under Theta Dam Estate, a mixed-use development on 183 acres parcel of land.  Others include Clay City Phase 2 to 4 which will feature 1,500 units, Clay City Commercial Centre, and Komarock Heights Phase 2 & 3 featuring 1,216 Units.

HFDI, the property development subsidiary of HF Group, has lauded the move by the Government to provide tax relief for Kenyans buying houses under the Affordable Housing Scheme, saying the move was timely. Commenting on the move, HFDI Executive Director James Karanja said the relief, coupled with the government’s plan to improve housing infrastructure, will lessen the burden for first time homeowners.

“Many factors contribute to high cost of properties including cost of funding such housing projects but one factor that has kept the prices of housing high is the stamp duty and the tax relief offer is welcome to the sector,” Karanja said.

Karanja was speaking ahead of the handover ceremony for the home buyers and open day for the Group’s Komarock Heights Phase 1 scheduled to take place on 10th August.

Komarock Heights is a modern development comprising 1272 beautifully designed apartments nestled within Komarock Estate, the development will be implemented in three phases.

Komarock Phase 1 comprises 480 residential apartments with a mix of two and three bedroom apartments in 20 blocks featuring separate dining area, en-suite master bedroom, common shower and separate WC, dhobi areas with enclosed gas cylinder chambers, lifts to all floors, solar water provision to every unit to allow homeowners to use sustainable energy for heating their water, handicap accessible units, backup water supply from a borehole, gated children’s playground, and a shopping mall.

“We will be offering a tenant purchase option for new buyers as an incentive to acquire a home in this development,” said Karanja.

Other projects completed by HF Group include Komarock 5A featuring 162 units, Komarock 5B featuring 115 units, K-Mall covering 12,000 square meters, Kahawa Downs featuring 235 units, and Precious Gardens Phase 1 featuring 165 units.

Projects nearing completion include the 248 units Richland Pointe Phase 1 scheduled to be completed by December 2018, the 152 Units Precious Gardens Phase 2 expected to be complete by June 2019, and the 240 units Clay City Phase 1A expected to be ready by January 2020.

Plans are underway to develop 5,000 units under Theta Dam Estate, a mixed-use development on 183 acres parcel of land.  Others include Clay City Phase 2 to 4 which will feature 1,500 units, Clay City Commercial Centre, and Komarock Heights Phase 2 & 3 featuring 1,216 Units.

“The demand for housing in Kenya is largely unmet and the government’s effort to produce 500,000 units annually in very welcome and we are ready to support the government,” Karanja said.

Source | Business Today