NAIROBI, KENYA: The Kenya National Bureau of Statistics (KNBS) Quarterly Gross Domestic Product Report quarter 3'2019 says that the real estate sector grew by 4.8 per cent on average, 0.3 per cent points higher than the growth rate recorded over the same period the previous year.
The growth is attributable to government support for affordable housing initiative, increased entry of multinational corporations and retailers into the country, infrastructural improvements which gave a boost to Nairobi and its environs as the regional business hub.
Other factors include rapid population growth which has created a demand for properties, especially housing.
While this paints a good picture for economic development, the land remains a key challenge to SMEs growth as they lack the financial muscle to own or rent as prices for the commodity rise steeply and continue to define success.
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Joseph Israel, the director Zerohero Properties Limited urges SMEs to save more and direct resources to land ownership rather than renting. He explains that high rent fees are not sustainable for SMEs growth.
“In our country, most of the population depends on SMEs and the same people, a bigger percentage of their income goes to payment of monthly bills like house rent. It is advisable for the improvement of our day to day lives, that we seek and save money towards land ownership. When one owns his or her land, for example for settlement this reduces some of these expenses and increases savings for investment in other areas like stocking and improving business, which will also increase his earnings, create wealth and finally better livelihoods,” points out Israel.
He, however, cautions SMEs to ensure they do due diligence before paying for any piece of land.
“It is equally important before anyone engages oneself into land purchase to do a background check to be sure that the seller or dealer is recognized, well known and duly registered and granted permission to transact such businesses by the government,” explains Israel.
“You need to do research of the property that you intend to purchase. One can opt to go for a search, buy a green card and even consider a site visit to view the property that you wish to buy,” before making any payments.
He adds that SMEs are drivers of economic growth and job creation in developing countries and it is therefore important to identify factors that hinder their growth such as streamlining land purchasing bottlenecks.
“Land is an imperishable asset and ever-increasing in value it is also the most solid security therefore one can purchase for investment, farming or even building a home,’’ notes Israel.