Nelly
Member
Cytonn Real Estate report projects that Kenya’s real estate sector will remain neutral this year with commercial offices and listed real estate sectors expected to record negative performance.
In a 2021 Real Estate Market Outlook, the real estate firm attributes the projected sluggish performance to a tough economic environment in the wake of the Covid-19 pandemic, which has resulted in reduced disposable income.
“We expect the land sector to record positive performance during the year, the commercial office and listed real estate sectors to record negative performance, while the residential, retail, hospitality and infrastructure sectors remain neutral,” stated Beatrice Mwangi, a research analyst at Cytonn.
The positive outlook in the land sub-sector is expected to fueled by the growing demand for development land especially in satellite towns, improving infrastructure with implementation of select projects such as the expansion of Waiyaki Way and ongoing Nairobi expressway, and positive demographics.
“In 2021, we expect an annual capital appreciation of 1.7 per cent,” Cytonn notes.
This year, real estate in the expected to be shaped by the continued focus of the government’s affordable housing initiative, improvement in the mortgage market, public-private partnerships in support of development and financing for the real estate sector, and the trend towards e-commerce.
“Despite the above, the sector is expected to face constrained financing for developers and ineffectiveness of Public-Private Partnerships (PPPs) for housing development.
There is also reduced disposable income among consumers and oversupply in select sectors which include; the middle – high end residential, the commercial office and retail sectors.
In a 2021 Real Estate Market Outlook, the real estate firm attributes the projected sluggish performance to a tough economic environment in the wake of the Covid-19 pandemic, which has resulted in reduced disposable income.
“We expect the land sector to record positive performance during the year, the commercial office and listed real estate sectors to record negative performance, while the residential, retail, hospitality and infrastructure sectors remain neutral,” stated Beatrice Mwangi, a research analyst at Cytonn.
The positive outlook in the land sub-sector is expected to fueled by the growing demand for development land especially in satellite towns, improving infrastructure with implementation of select projects such as the expansion of Waiyaki Way and ongoing Nairobi expressway, and positive demographics.
“In 2021, we expect an annual capital appreciation of 1.7 per cent,” Cytonn notes.
This year, real estate in the expected to be shaped by the continued focus of the government’s affordable housing initiative, improvement in the mortgage market, public-private partnerships in support of development and financing for the real estate sector, and the trend towards e-commerce.
“Despite the above, the sector is expected to face constrained financing for developers and ineffectiveness of Public-Private Partnerships (PPPs) for housing development.
There is also reduced disposable income among consumers and oversupply in select sectors which include; the middle – high end residential, the commercial office and retail sectors.