Real Estate Mkt Brief
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Transcript of Real Estate Mkt Brief
THE PROPERTY SCENE - NAIROBI
SPECIFIC MARKET BRIEF – JULY 2012
BY
BRAMPTONS REAL ESTATE
FOR
LUCAS CHACHA
UNDERSTANDING THE REAL ESTATE MARKET. Real estate is a very practical and cash intensive business in every aspect of it – be it letting, development, sales
management or even consultancy.
The market in Kenya is segmented from the low cost to the real upmarket. The market segments vary by location, type
& quality of property, property prices and their various operational dynamics.
To understand the market, we take you through a three pronged approach thus – Awareness – Education – Action.
Awareness:
This is where you determine how much you’re willing and are able to access and spend in the market. This budget will
dictate the segment and areas that you will participate in within the market.
We then advise and let you know what is likely to be available for you. In addition you will be taken round to view at
least three properties from which you will then have an idea of what your money is worth in the real estate market
which will further help you strategize going forward.
Education:
We give you access to information that will demystify the market complexities and this will be dedicated to the market
segment you are able to access at the time.
The various areas covered are:
Location – what areas within the city fall within your segment
Types of properties available.
The ownership structure / Property tenure.
Property prices – both for let & for sale.
Financing brief.
Sample properties
Bonus material
Action:
This step can only be taken by you after understanding your priorities and goals. Thus:-
Getting your finances in order & if necessary applying for a mortgage / loan.
Selecting your preferred property for acquisition.
Buying the property.
Managing your investment.
LOCATION.
Your easiest access point to the real estate market
would be the lower mid market segment which as
always is characterized by more renters than buyers of
property.
Essentially this means that the segment is very
attractive for cash flow investments derived from the
regular rental income.
This becomes further appealing as you increase the
number of units you own thereby pushing up your
leverage ratio while simultaneously you benefit also
from capital gains via increased value of your total
assets over time.
The lower mid market areas in Nairobi that are within
your reach are:
1. Along Mombasa road – imara daima estate, athi
river, ruai, syokimau / mlolongo, embakasi along
airport north road.
2. Langata Road – langata estate
3. Magadi road – rongai estate
4. Thika road – Parts of pangani Estate, mathare area,
Ngumba estate, Roysambu, Zimmerman, kahawa west,
kasarani, Mwiki, Kahawa wendani, Juja ,Ruiru, Githurai.
5. Limuru road – ruaka area
6. Naivasha road – Area past Dagoretti corner.
Types of Properties:
The kind properties in the lower mid market are
predominantly low cost housing including:
Multiple Residential units i.e. Apartments /
flats – predominantly 1, 2 & 3 beds.
Maissonattes – detached or semi detached –
typically 2, 3 & 4 beds.
Sectional land – land available as fractional
pieces to the acre - predominantly 1/8, 1/6, ¼,
½ etc
There are some areas within the entire market where
land cannot be subdivided below 5 acres, 2 acres, 1
acre, 0.5 acres, and so on, also in the same breath there
are areas you cannot develop commercial properties,
high rise residentials and so on – the reason for this is
because each inch of the entire market is subject to
physical planning regulations and a bundle of other
operational regulations.
Selecting houses have therefore to be done by a keen
eye to get the very best of this segment as the prices
between the cheapest and most expensive houses do
not vary by a huge margin.
In addition, when selecting a house one has to pay
attention to the quality, the neighborhood and the
convenience the property provides to the-would be
occupant & because this is for investment purposes
then of all these factors the most critical is the price.
The relationship between the price (P) and the return
(ROI) has to make sense to the investor.
Ownership / Tenure:
The Kenyan land laws allows ownership of property in
various ways through a myriad of legislation i.e. Land
Titles Act, Government Lands Act, Registered Titles Act
and so on.
More generally property in Kenya is either held as
freehold or leasehold.
The new constitution of Kenya and the ongoing land
reforms will ensure majority of property ownership is
leasehold with the term of the lease having a
maximum period of 99 years renewable at the lapse of
the term.
The title structure:
Since you are likely to get a property in a gated
community this will be the likely title structure.
There is a main title for the entire piece of land upon
which the development is done.
Each unit will receive a lease for their house with a
share in the management company.
The management company will receive monthly
payments from all owners of units to act as the service
charge and to be used to manage the common areas
i.e. compound cleaning, gardening, lighting, security
and garbage.
For any new property you are purchasing the most vital
issues to check are:
Availability of fresh water – municipal water, borehole
water and extra storage tanks for each house.
Security – the security status o the neighbor hood -
watchmen and electric fencing.
Types of properties and prices:
TYPE SIZE PRICE RANGE
MAISSONATTE 1 - 2 BED 3 - 4M
2 - 3 BED 4 - 8M
APARTMENT 1 - 2 BED 3 - 5M
2 - 3 BED 5 - 8M
RENTAL RATES
SIZE RANGE - langata rd / msa rd RANGE - Thika rd
1 bed 15 - 18k 10 - 15k
2 bed 25 - 35k 16 -25k
3 bed 30 - 40k 25 - 30k
AMARA PARK – imara daima – msa rd 1BD 4.5m, 2BD 5.5m
Amara Park is a premium lifestyle address offering
value for money. The superbly designed apartments
are located next to Imara Diama; off Mombasa road,
adjacent to General Motors and is 10 kilometres from
the CBD.
There is easy access to the City Center, Industrial Area,
the Jomo Kenyatta International Airport and the ICT
Sameer Center.
The choice of the architecture concept is suited to the
environment with additional value through keen
attention to design concepts, floor plans and superior
finishes. Ample parking spaces are also provided.
The five blocks with 20 apartments each are amidst a
playground surrounded by well manicured lawns and
landscaped gardens. A borehole will enhance the
availability of water.
Greatwall apartments – BEIJING RD OFF MSA RD – 2BD 4.0M
GREATWALL APARTMENTS is a comprehensive fully
serviced development comprising 528 apartments each 2
bedroomed.
THE PROPERTY IS LOCATED along Mombasa road near
Mlolongo Township along Beijing road.
When visiting the property from Nairobi just after the
gate to Directorate of civil Aviation take the road on left
side of main highway and pass the gate of All-pack
Industries to join Beijing Road.
It is approximately 18 km from Nairobi town center and
9 km from JKIA.
The property is securely stone perimeter walled, one
gate and security guard house. The access road namely
Beijing road is cabro surfaced to the newly constructed
Mombasa highway.
WATER is supplied from bore hole as well as from EPZ
Athi-river to ensure there is plenty of clean water
supplies throughout.
The structural work is by well known contractor
namely China Wu Yi construction who in teamwork
with the developer, project management team and
other technical consultants insist on highest technical
skills and materials for the entire project.
EACH APARTMENT is finished with colored ceramic
tiles on floor, all wet areas and full wall in the kitchen.
The kitchen is fitted with inbuilt MDF cabinets and
solid work-tops. Both bedrooms have inbuilt MDF
wardrobes.
The kitchen has an adjacent laundry area .All rooms are
well lit with large windows for adequate ventilation.
The COMMERCIAL center comprise of shops,
restaurant and kindergarten.
FIVE STAR GARDENS – 2 BD, 5M - 3BD, 6M
A community of 313 elegant two and three bedroom
apartments set in a secure gated community with lots
of gardens and playgrounds.
Every apartment is spacious, bright, stylish and,
complete with modern finishes.
In addition, each unit is situated in one of the 5 courts
created for enhanced privacy and security.
Five Star Gardens will add a new sparkle to your life and
change the way you live forever.
2bd – 5m
3bd – 6m
Tamarind Valley - Embakasi Nairobi
Tamarind Valley at Embakasi offers eight different
choices, because no two families are the same. Our
entry level unit is a two bedroom low-rise apartment
that has a lounge, dining room and kitchen which also
has a laundry yard. We also offer the same style of
apartment, but with three bedrooms for that extra
space.
There is a two bedroom bungalow with a lounge/dining
room and kitchen, all set in its own compound. It comes
with in two different options; semi-detached and
detached.
Moving on, we are offering a three bedroom bungalow
with a lounge/ dining room and kitchen in its own
compound. Like the two bedroom bungalow this also
comes as either a detached or semi-detached house. We
then have a three bedroom detached bungalow with
master en-suite, lounge/ diner and kitchen. This
house enjoys a larger compound. It also has the
option for a Domestic Staff Quarters.
Finally, we then have a three bedroom maisonette
offering more spacious accommodation, but at an
affordable price. It also has an option for a
Domestic Staff Quarters. At Tamarind Valley we
have a home to suit every family.
Tamarind Valley at Embakasi... a place to call home
- Close to a modern shopping mall
- External wall
- Borehole
- Waste water recycling
- Individual courts with green areas
- Street lighting
- Cabro roads
- Landscaping including generous use of trees and
shrubs
2 Bedroom apartment 3.9M
3 Bedroom apartment 5.7M
2 Bedroom semi detached bungalow 4.8M
2 Bedroom detached bungalow 5M
3 Bedroom semi detached bungalow 6M
3 Bedroom detached bungalow 6.25M
3 Bed master en-suite detached bungalow 7M
3 Bedroom Maisonette 7.5M
Imara Gardens – msa rd – 2bd + sq – 6.4m, 3bd +sq – 7.4m
Imara Gardens Housing project is situated on outskirts of
Nairobi Mombasa High way; 7 KM from Nairobi city
Centre and 3 km from the Jomo Kenyatta International
Air port and 5km to Southern bypass.
Its proximity to the main Nairobi – Mombasa High way
and City Centre, Jomo Kenyatta International Airport and
the first growing Athi River and Kitengela town makes
this development worth while investment.
Social recreation and shopping amenities are available
from Riara school, Capital Centre Mall (Mombasa Road)
Taj mall (Airport road),
Nakumatt Embakasi, Mather Hospital, Ole serene Hotel,
Panary sky Hotel, Nyayo Stadium, Jomo Kenyatta
International Airport and Sameer Business Park.
Features:-
Spacious lounge with a balcony
Dinning
Fitted kitchen
A common cloakroom
In built wardrobes in all bedrooms
More features:-
3 phase power supply by KPLC
Paved driveway
Drainage and street lighting
Spacious children playing ground
Gated compound with a shopping centre
Price:
2 bedroom and DSQ (97 SQ.M) Kshs. 6.4 M
3 bedroom and DSQ (132 SQ.M) Kshs. 7.4M
FINANCING OPTIONS:
Housing finance generally finance up to 85% the value of the property/ sale price (whichever is lower) for a
maximum period of 15 years.
Below are details of our mortgage and requirements:
Maximum Loan Amount : 85% value of the property or sale price (whichever is lower)
Maximum Repayment Period: 15 years
Closing Costs:
These are costs related to house purchase. They amount to 7-8% value of property i.e. stamp duty (4%), legal fees
(2%), HF commitment fees (1%), valuation fees and insurance fees.
Deposit Required: 15% of the purchase price plus 8% closing costs
Documentation Required (can be sent via e-mail or registered mail):
Full copy of passport,
Copy of work permit/ residence card,
Kenyan PIN certificate
Introduction letter from employer stating employment terms
3 months Pay stubs
6 months Bank statements
Current utility bills –power/ water OR rental lease.
Sale agreement/ offer letter for the property. If you have not identified one, log onto www.propertypoint.co.ke
Fill in application forms available on our website: www.housing.co.ke
Processing: The whole transaction should take 45 days. An offer letter on approval should be given within 5 working
days.
Choose the home loan that suits you: Budget with peace-of-
mind by choosing a fixed interest rate for the first 5 years. Or
you can opt for our variable interest rate from the start of your
loan.
Competitive interest rates: Our interest rates are designed to
make your new home more affordable. What's more, our
extended loan periods up to 20 years make your monthly
repayments even easier.
Get the home you really want: With maximum loan amounts
up to Kes 50 million and loans up to a 90% * of the value of
your new home, you never have to compromise on your dream
home.
Who is eligible:
All Kenyan Citizens, Permanent Residents or Expatriates are
eligible.
Maximum age at the end of the mortgage term must be 60 or
retirement age, whichever is earlier.
Salaried Customers or Directors of reputable companies or
well-established SMEs with demonstrable and verifiable
monthly income for the past 12 months.
Professionals and consultants who earn a regular monthly
income and are purchasing a residential property for owner
occupation.
Facility arrangement fee: 1 % of loan amount (Minimum Kes
10,000)
Other Costs you will be expected to meet
1. Legal Costs and Stamp duty – varies depending on
property value and location
2. Fire (property) insurance – Comprehensive insurance
with the Bank’s interest duly noted
3. Mortgage protection insurance for the borrower – to
safeguard the borrower during the mortgage term
4. Valuation fees – upon approval of application, the
property should be valued
Documentation you require:
Completed and signed application form.
Last 3 Pay slips – certified copies.
Certified letter from employer stating terms of
employment
Certified Copy of ID/ Passport
Copy of PIN Certificate
Sale Agreement
Documentary evidence of any other income
Certified Copies of bank statements for 12 months
(for non-Standard Chartered customers)
3 colour passport size photos (for non-Standard
Chartered customers)
Copy of Title Deed
*Requirements may be more or vary for Kenyans residing out
of the country.
Requirements for a Mortgage Transfer
Mortgage statement for the last 6 months
Completed and signed application form
Last 3 Pay slips – certified copies
Certified letter from employer stating terms of employment (it should include your pay/position/duration of service/retirement age
Certified Copy of ID/ Passport
Copy of PIN Certificate
Documentary evidence of any other income
Certified Copies of bank statements for 12 months (for non-Standard Chartered customers)
3 colour passport size photos
Copy of Title Deed
S & L - General Mortgage
Eligibility: Available to both employed and self-employed persons with a monthly income greater than Kshs.
Amount Financed: 90% of the value of the property
Interest Rate: 13.5%p.a. Variable, 15%p.a Fixed
Maximum Financing Period: 25 years
Maximum Loan Amount: Depends on ability to repay
Appraisal Fees: 1% of the loan amount
Other Fees (third party fees):
Stamp duty – 4% of the value of the property Insurance – approx. 1% of the value of the property Valuation – approx. 0.3% of the value of the property
Early Settlement Penalty: No
Financing to Kenyans in the Diaspora: Yes
Benefits
Flexible repayment terms Joint borrowings Capital appreciation Own occupation Savings on rent Mortgage relief tax benefit Free mortgage advice Friendly customer service
Ordinary Home loan - Get 100% financing
Loan or property value should be between Kes. 3M and 10M
You must be a salaried individual with a minimum gross salary of Kes. 100,000
The property has to be a developed residential property
The maximum loan repayment period is 20 years
With our access mortgage feature, you can make lump sum deposits and withdrawals on your Home loan account at no cost
Approval is within 4 days after receipt of all documentation and a dedicated centre to assist you through the home loan process
Competitive variable interest rates linked to the bank’s base rate
Embedded credit life protection insurance in the loan repayments
Low facility fee
Get 90% financing
The loan amount required should be at least 1M
Home loans are available to both Salaried individuals and Self Employed Individuals
We finance up to 90%of the value of the property value or the sale price, whichever is lower
The maximum loan repayment period is 20 years
With our access mortgage feature, you can make lump sum deposits and withdrawals on your Home loan account at no cost
Approval is within 4 days after receipt of all documentation and a dedicated centre to assist you through the home loan process
Competitive variable interest rates linked to the bank’s base rate
Embedded credit life protection insurance in the loan repayments
Low facility fee
http://www.cfcstanbicbank.co.ke/Kenya/Personal/Borrowing/Home-Loans/Ordinary-home-loan
Cooperative Bank – Home loan.
Terms
-Maximum loan as percentage of value (LTV): 80%
-Loan term: up to10 years.
-Additionally, customer should have lived in the
country of residence for at least 1 year at the point of
applying for the mortgage.
Currently the rates are: 1- 10 years 13.75%
Home loan
Financing up to 90% of the cost of the home you
choose to buy, and they will guide you carefully
through the whole process.
Interest rate: 11.99%.
First step requirements;
-A regular income
-Minimum age of 18 yrs
-Valid identification – ID or Passport