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