What the future has in store for real estate

Ben Woodhams, MD, Knight Frank Kenya, talks to Peter Muiruri on what the future has in store for the real estate sector

Is the real estate sector still a preferred investment vehicle?

Yes, we have things looking up. First, Africa is run from three hubs – Lagos, Nairobi and Johannesburg. Nairobi serves a huge geographical region with a lot of potential for growth. In Kenya, you have infrastructure projects such as Lapsset. Real estate investments fit right in.

Many put 2017 as one of the worst years for the industry. Was it really that bad?

Several factors conspired to suppress the industry. However, the electioneering period was a key reason for slow performance. Last year, we had not one, but two elections. However, anyone who has observed the business field in Kenya knows that the economy slows down every fifth year due to the elections cycle. It normally picks up after the elections.

How have you performed as a company in the last few years?

Twenty-fifteen was one of our best years ever. However, the trend was reversed in 2016. We saw a number of oil companies exit the scene with the fall of global oil prices. This left a number of Grade A offices vacant. This was also the year the interest rates cap became operational, leading to some liquidity crunch. The year also saw Nakumatt tumble. Well, 2018 is the year we move on.

Other regional economies seem to be giving Kenya a run for its money. What makes Kenya different?

Kenya has a very diversified resource base. Many African countries rely on one key product such as oil or minerals. Any turbulence in the price of such commodities unsettles the economy.

You are very positive about Nairobi bouncing back quickly. Why the optimism?

Nairobi is a hub for a number of international organisations. We have many Grade A offices that attract such international clientele. Kenya Airways’ new route to the United States will bring more real estate investors to Nairobi.