KCB to invest Sh28b in property development
By Standard Reporter | May 28th 2015
NAIROBI: Kenya Commercial Bank (KCB) will on Saturday launch this year's edition of its property tours to showcase real estate progress in the city to prospective clients.
The launch comes after the lender sought a Sh28.2 billion loan from Development Finance Institutions, in what will see its long-term loan book more than double to fund key developers in the construction and other industries. So far its mortgage book is over Sh45 Billion, which is over 31 per cent of the market share.
"We want to be able to fund property developers leveraging on the rising demand for housing. Prices in Kenya's residential property market continue to rise, amid robust economic growth and a sharp increase in the population of middle-class and expatriates," said Sam Muturi, KCB Mortgage Director.
According to available statistics, domestic property prices in Kenya have sky-rocketed; a stunning 357 per cent from 2000 to the third quarter of 2014. The total value of residential properties constructed in the city last year stood at $1.32 billion, marking sustained construction, with real estate remaining one of the most lucrative sectors in Kenya.
"The property market has potential for higher rates of return compared to other jurisdictions. Last year, Bus Tours were very successful, exposing young clientèle to varied properties in major cities and contributing largely to our numbers, added Muturi.
Kenya's economy is expected to grow by 5.7 per cent this year, almost the same as the previous year, according to Kenya Bureau of Statistics. Hence the property market is expected to remain strong in coming years.
The recent global economic meltdown can be traced to the housing market, an indication that it is difficult to assure absolute safety in the housing investment segment. The bank is targeting the growing demand for housing to bridge the deficit. The bank will also organise regional tours in the year eyeing Mombasa and Kisumu.
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