Unco-ordinated Real Estate Sector

Is it time for a real estate regulator? This was the question left on the lips of me and a colleague after a long exchange and i this was the analysis.

 

A Block of Residential Apartment in Nairobi

 

Real estate is one of the fastest growing sectors of Kenya’s economy today because housing has become the most preferred investment asset among households and other investors. However this enthusiasm has come with a number of challenges; among them:

• Substandard constructions;
• Collapsing buildings;
• Delay in project completion;
• Delay in getting the necessary consents, approvals and/or documentation;
• Financial loss (deposits or entire amounts);
• Unplanned estates and urban sprawl;
• Irregular acquisition of public land;
• Undocumented investors;
• High property prices;
• Bad investment decisions as a result of limited information or poor advice;
• Disputes and protracted litigation.

Numerous players provide goods and services to the sector. They range from government departments, local authorities, financial institutions, developers, professionals, brokers, advertising agencies to building materials suppliers.

Professionals in the sector operate under different umbrella organizations which regulate members’ activities. However a sizeable number of “consultants” are not registered or licensed to practice. This has caused disjointed activity within the sector leading to confusion, losses, frustration and apprehension among potential investors.

Is it time the government steps in and sets up a regulatory body that will act as a reference bureau and also provide guidelines for orderly, transparent and efficient management of the sector?

If constituted, such a body should be an independent entity with representatives from all stakeholders and be charged with the responsibilities of ensuring that:

ü  Buildings are constructed and completed as per approved plans and specifications;

ü  New developments have the required approvals before construction commences;

ü  All constructions are supervised by registered and licensed professionals;

ü  Developers meet completion timelines;

ü  Scrutinize title documents and provide advice to potential buyers;

ü  All service providers are registered with respective professional organizations;

ü  Standard operating procedures are set;

ü  A website is set up where service providers are listed;

ü  All agents are vetted and all properties being offered for sale;

ü  Data on property transactions and investors’ details are kept;

ü  Research on real estate is carried out and a journal produced periodically;

ü  A property market performance index is prepared;

ü  Complaints in the sector are attended to expeditiously;

Some members of the public believe the establishment of such an authority will ease public anxiety and restore confidence to the sector.

Professionals agree that research and preparation of a property market index will make property investment decisions more analytical and economic fundamentals oriented rather than market perception driven as is the case today. Some are of the view that a regulator is critical for the success of the proposed Real Estate Investment Trust companies in Kenya because investors will require comprehensive information from trusted sources; otherwise they may shy away.

 

That’sall….. *with a Meryl Steep Accent*
© 2010

The Wake Up Call!!!

"Future Leaders"

When we were busy growing up we were told by the old guard that we are the leaders of tomorrow. What they never told us is when tomorrow begins. Or maybe we need a redefinition of word youth. If people approaching their late fifties and some septuagenarian can be categorized as young Terks, then Kenya must be having the oldest young Terks world over. It makes, in my twenties, me feel like a feotus.

My discomfort is not solely based on age but rather the way these old folks steer the country. It’s the high time young people made it their business to take over business of running the country, because nobody is going to give it to them anyway. And by the young people I don’t necessarily mean the sons and daughters of the current leadership that has plundered our country. Most of them are just a chip off the old blocks whose interest in politics is driven by the urge to protect ill gotten wealth and other questionable interests.

What we need is a silent and peaceful revolution. The beginning point of this revolution should be the realization that we get the leaders we deserve. Thus the current crop of our leadership is just a mirror image of what our society has become. This can be evidenced by the student leadership and politics of our institutions of higher learning which similar if not worse from the national politics. This is unfortunate because these are the crème de la crème of the society and in some instances opinion shapers in their various neighborhoods.

The earlier we accept the fact that indeed there are only two tribes in Kenya that is “The Haves” and “have not’s” the faster we will resolve the leadership inadequacies. History has taught us that revolutions take place when there two opposite classes battling each other. We need to inculcate within us a value system that will set us apart from these folks…..To be continued

That’s all…. *with a Meryl Steep Accent*

© 2010

Welcome back.

its been a Looong minute!!!

Been a busy bee…he he

Life got busy and squeezing in time to post a blog worth a read proved tricky. Atleast now i can say things have easened up and yes back to blogging, with a new twist, hopefully

Relocation of Office of The President.

This is a guest post by my good friend Felix.Felix is a good friend and part of the @chessunday Network.

He brought us the previous post NAIROBI’S OWN UNIVERSITY DISTRICT . I am grateful for his contributions. The previous post was on the emerging trend of Universities seeking to have their campuses at the Central Business District.

Today he submits a fresh post on the seat of power. I trust you shall enjoy the read…

THE SEAT OF POWER

In a republic like Kenya, there is no doubt we only have one significant “Seat of Power”. What has caught our eye is the recent plans, good or bad, to shift the location of that seat. By location we mean where the physical home of the Office of the President.

Plans are at an advanced stage to move the office of the president from Harambee house along Harambee Avenue, in the city centre; to Upperhill.The said new office of the president will have 60 floors, effectively making it the tallest building in Africa. The building will be located between where we have the traffic head quarters and Caparo House.

From afar, this idea looks captivating and welcome; especially the thought of having a 60 storey tower in Kenya’s capital. However, in my opinion, this move is not entirely well advised when many things are put into consideration.

Just recently, the Nairobi city council imposed new parking charges in the city that proved unpopular, to the extent that they were challenged in the court of law. According to the Minister of Local Authorities and the Town Clerk, the move was intended to de-congest the city from traffic snarl ups. It defeats logic therefore if we put this in perspective and revisit the relocation of the seat of power from the City Centre to Upper Hill, which is just a few meters away from the city centre.

Not Cool?

The proposed relocation of the office of the president to Upper hill is bound to create congestion in an area that has been hitherto not crowded. The traffic jam will be inevitable considering that the sixty storey building will also be home to several ministries or government agencies.

It goes without saying that this move will make sure that Upper hill loses the serene allure that it has been associated with.

Most of the organizations in Upper Hill were originally located in the City Centre and moved to Upper Hill so as to run away from the noise and congestion. Take for instance Old Mutual, Teacher’s Service Commission and PriceWaterhouse instance that were located in the city centre but relocated to Upper hill.

As it is now Upper Hill seems to have reached the peak of its carrying capacity. This is when one bears in mind the road sizes and if the cool environment is to be maintained. Currently, the roads in upper hill are being expanded in an exercise that has proved to be difficult due to the unavailability of adequate space. This is mainly attributed to the fact that Upperhill was initially a low density residential zone that was recently converted into a commercial zone. As such the roads and other service lines that are present are insufficient for the burgeoning commercial use.

“Traffic jams impact the overall productivity of our society and are a real threat to our development”- Unknown

History has shown that when an area is stressed with over-development and the space for development is limited, development is choked and negative returns begin to set in.

There is a restriction on the height of buildings in Upper Hill.”Upper Hill”, as the name suggests, is one of Nairobi’s highest peaks, and it being near the flight path of Wilson Airport, the restriction comes in handy.

WHERE SHOULD THE SEAT OF POWER BE?

In the United States, as is with most developed nations, the residence of the President, state house, in the case of Kenya, also doubles up as the office of the president.

If the government adopted this approach, the activities of the office of the president will be centralized for effective administration. Further, city residents will not be subjected to frequent traffic snarl ups that are occasioned when the president is shuttling between Harambee House and State House.

Another approach would be to locate the office of the president far away from the city centre in a bid to activate development in other areas as is the spirit of decentralization.

Possibly Moyale would do?

Thank you!

-Felix Maloba || @mafex_inc

Kenya’s Premier University District

The past six years have seen a rapid and steady growth of Universities, both local and International, within Nairobi’s Central Business District (NCBD).Virtually every Public University has a campus in the CBD.This is a trend that raises more questions than answers. The scramble for any available space by the universities has been evident even to the untrained eye. A case in point is the Posta Sacco building that was purchased by the K.E.M.U University for a staggering Kshs. 2.4 billion in 2009. It was alleged that the bidding process was so intense, that it had to be redone. Matters were not helped by the fact that, Proff Magoha, UoN Vice Chancellor had vowed not to see competition on his door step.Ofcourse he had to give in the end after he failed to convince the University senate as to why he was willing to expend Kshs. 4billion in the name of keep competition at bay.

Anyway that is beside the point. The elephant in the room is; what is the driving force behind this location behavior of Universities and what are its socioeconomic impacts. Conventionally world over educational land uses have set far away from the CBDs.This is mainly due to their large space requirement and need for a serene environment.

The rapid increase in demand for higher education seems to be the main cause for this trend. Statistics have it that the uptake for university students has risen from about 20,000 students in 1990 to 41,000 students in 2005.The increase in the number of people taking MBA’s can also be cited to contribute to this trend. Most Universities struggle to have a campus in the CBD because it affords ease of access and convenience and complimentary facilities and services. It also helps to note that The University of Nairobi has acted as the point of gravity as most of these universities surround it.

Graduation ceremony in a local university

Some of the notable effects of this phenomenon have been the nature of businesses being set up and the change in lifestyle trends in the area. This area has arguably the highest density of Coffee houses, night clubs and even theatres.Some of the business that were located in the area have been forced to conform to the tastes and preferences of this student population. This includes changes in business names and even style of business.

Some of the negative effects of this budding University District have been; traffic congestion, noise and increase in rents which have led to increase in the cost of doing business.

My main concern in this unfolding event is whether this trend is optimal and sustainable. Whether this move by Universities is rational or not is a question best answered by time. However, I foresee a scenario where, due to lack of enough expansion space, there will be self destruction and chocking off of further development. This will be mainly through high rents and congestion.

For those who Missed Kenya v Uganda

The last time i was inside the Nyayo National Stadium was in 1998, when AFC Leopards was playing with Mumias Sugar…needless to add that i was an ardent Ingwe-AFC Leopards fan.I guess since then ive never had either the time and or  enough motivation to pay the place a visit.But 9th October 2010 gave me all the reasons pay the stadium a visit.

From where i sat

The match was between Kenya’s Harambee Stars versus Ugandan Cranes,an East African Derby as many would have it.The love hate relationship between these two neighbouring countries is not divorced to their soccer relations,and each country is always eager to prove to the other whose the boss when an opportunity presents itself.

Soccer enthusiasts had flocked the stadium from as early as 9 am.Actually i even found it hard to concentrate on my work in the office,which is a few meters away from the stadium,because of the noise generated by the fans.Finally when i could not help it anymore i headed to the stadium with a colleague.I made sure i bought a kenyan flag as a sign of patriotism and the long queues outside the stadium couldn’t discourage me.

While on the queue i had a GSU officer saying that that queue was reserved for Ugandans,i could not imagine myself joining another queue.I had to be creative i folded my kenyan flag and kept it in my pocket and began talking in that heavy Baganda accent and it did the trick,i was inside the stadium faster than you can say Usain Bolt.I was seated directly opposite the VIP terrace.I think the terrace is called Russia,atleast as par the last time i checked.Here you’ll find all manner of characters you can conjure up in your mind.Once you are there,as most of our kenyan politicians will tell you,you either shape up or ship out.

No sooner had i sat down than the bellows of smoke from bhang engulfed the entire atmosphere.When i tried to tell the culprits to go slow on the marijuana, i was told “kama unataka starehe si ungelipia VIP” (if you wanted comfort you should have paid for the VIP.This was my cue to shut up and comform lest i suffer the wrath of intoxicated and overly frustrated harambee stars fans.The stadium was packed to capacity so shifting positions was not an option.So to survive i formed convenient friendships with my fellow fans plus i was planning to tweet all through the match (because it was not being televised) , so hey i needed friendly people around.

Well the match didn’t live up to its expectations,save for some few sparks of individual brilliance from the usual

Oliech Appreciating talent

suspects,Mariga,Oliech,Blackberry and Sunday.Infact if you ask me the side shows were more interesting than the match.

There was drama all the way from the City centre to the stadium.The Ugandans nearly executed their threat of painting Nairobi yellow.I gave it up to the Ugandans for the love of their national team,they came in droves as if their number could swing the result to their side.

First to arrive were the Ugandan players amid cheers from Ugandan fans and jeers from kenyan fans.Then followed by the convoy of kenyan players led by Oliech’s family in their sleek chrysler.As we waited for the players to come out from their dressing rooms we were entertained by a young footballer who displayed exceptional ball control skills,oh my! you had to be there to understand what i mean…ill upload the video.My only beef with him was that he was donning a yellow jersey,which happened to be cranes colours…i wondered where his loyalties lied.

Brilliant ball control skills in play

It was also worth noting that the stadium was full with a bevy of beauties a scene that was unimaginable in the last 10 years.I think the saying that football is a game of gentlemen watched by Thugs, must have gotten a new meaning.Also in attendance were, for the first time i suppose,The bad boy of kenyan politics Sonko a.k.a Mr. Moneybags, Martha Karua and Kalonzo.I really lauded their presence,hoping that it was not done to gain political mileage.

match in full swing

Oh yeah!! the Mexican wave, again you had to be there to experience it.The Ugandans were unco-operative at the beginning but eventually, after admiring how it worked they joined the fray.

At the end of the barren draw, Kenyan fans left the stadium dejected and giving all manner of reasons as to why we didn’t win.There was a fan who infact said that we didn’t win because of the presence of Kalonzo,Martha Karua and Sonko,that they were bad omen…its from this statement that i gauged the magnitude of dissapointment of kenyan football fans with their perpetual underperfoming national team.

Having seen the Ugandans behind their team 100% in Nairobi, i craved supporting Harambee stars in an away match.Actaully i’m looking forward to their Kampala match next year God willing.

The Ugandans had a clear message for the Kenyans, that we should expect an uphill task once in “CHAMPALA” as they pronounce it.Well one thing is for sure,if Museveni continues beating the war drums like he did before this match,then am expecting Kenyans to go to Uganda in their numbers just to prove a point.

Well much as i was dissapointed with the result,atleast my friend at the Ugandan Embassy had something to smile about and am still waiting for a drink from him.

That’s all……  *with a Meryl Steep Accent*

© 2010

The more less you know the richer you might become.

I pulled this mathematical problem somewhere and i think it might be of help to you

About your salary:

Engineers and scientists will never make as much money as business executives. Now a rigorous mathematical proof that explains why this is true:

Postulate 1: Knowledge is Power.
Postulate 2: Time is Money.

As every engineer knows,

Work
——– = Power
Time

Since Knowledge = Power, and Time = Money, we have

Work
——— = Knowledge
Money

Solving for Money, we get:

Work
—————-

= Money
Knowledge

Thus, as Knowledge approaches zero, Money approaches infinity regardless of the Work done. Conclusion: The less you know, the more money you make.

That’s all …… *with a Meryl Steep Accent

© 2010

Two Funny Gay Passes in Lamu

Lamu prides itself as the oldest town in Kenya and by extension East Africa. It is a town with beautiful sites and experiences to behold. Actually, one post isn’t enough to put into perspective the life in Lamu.On an official assignment at the Coast late last year, I made it my business to visit this much talked about Island. Coincidentally, Kebaya, a former college mate, was also on an official visit at the Coast, had the idea of going to visit the historic city.So we made arrangements on how we will have our trip done after wider consultation with the locals.Since we were in Mpeketoni,a small town in Lamu Disitrict,for adventure sake,we decided to use a motor bike upto to the jetty,which was about 30mins away.We had to finish part of the journey by foot after the motorbike developed a puncher.

The Jetty to Lamu

Ar the Jette,we had to board a motor boat at a cost of kshs 1500,to reach the island.We were the only africans, with the rest of the passengers being Arabs*read Kenyans of Arabic decent*. The boat ride must have been the most captivating and at the same time, horrendous experience I’ve ever had. Midway the trip I couldn’t see any land, with the entire horizon submerged by the vast expanse of the Indian Ocean. My mind wondered of limitless possibilities.

Then this Arab man seated next to me asked inquisitively about  what had brought me to Lamu.I was quick at answering him, with the hope that a conversation could calm my down my now tension filled nerves. “Just on some fact finding mission” I told him. I was mentally prepared for the next question which, logically, according to me, should’ve been something like; what kind of research, but interestingly enough he asked me ‘’…una kalamu wewe’’ (Do you have a pen).Though a little bit puzzled by this line of questioning, I happily answered in the affirmative drawing out my biro pen. He looked away in a show of disappointment, while the rest of the passengers were sheepishly smiling. While I was still trying to come to terms to this bizarre conversation, I received a text from my pal who was seated behind me,informing me that that was a suggestive pass from a homo.I felt my skin crawl and I couldn’t wait for the boat to reach the island. When it docked, I jumped out with the zeal of a just released prisoner.

Once on the island, i decided to cast away my fears and savor the historic beauty and architecture of this town. The town was surprisingly quiet with not so much of activity going on at that time of the day. After doing some few rounds, we entered a small eating place, I wouldn’t call it a restaurant, well, they don’t have such there…and we ordered some of those unique coastal foods. After finishing our meal, we called over the waiter asking for our bill. The waiter gladly told us that the bill had been settled. There was a mixture of surprise and happiness on our faces. When we asked by who, he pointed to the direction of a middle aged Arabic man, I felt like flying out of that hotel and the Island alike, we left in a huff.

A busy street in Lamu

Despite this,we decided to stay on against our better judgment, after all it’s not like someone held a barrel against us, plus the people of Lamu were friendlier than one could ever imagine. We went to the beach for some swimming and sunbasking and realized that Lamu has one of the most beautiful beach line you can ever find along the Kenyan Coastline; calm, with clean sand and an expansive view.Actually i could see Somalia.

At around 6pm the town comes to life, vendors open their shops, number of tourists begin to swell, and exquisite coastal music tunes fill the atmosphere. Sadly we had to leave that evening so as to prepare for departure to Mombasa the following day.

It was hard to find a boat leaving Lamu to the Jette, mainly because most boats, were bringing tourists to the Island at this time when the nightlife is abuzz. Finally, at the cost of an arm and leg we found one boat driver that was willing to go to the jetty in that evening darkness.During the journey back I reflected the two gay passes I experienced, and mentally laughed when I remembered being told that in Lamu boys are usually kept indoors, the way girls are kept indoors and protected in other places so as to stay safe and not learn bad habits (gayism).

That’s all…….  *with a Meryl Steep Accent*

© 2010