Tuesday 6 December 2016

Safaricom’s Sh4.3Bn Machakos real-estate project to open in 6 months

The development is being put up at a cost of 4.3 billion in Machakos County with the centre piece being a 200,000 square feet mall with a total of 200,000 Square Feet of lettable floor space, and a residential area consisting of 3 and 4 bedroom townhouses, plus a cluster of 3 bedroom apartments.


Safaricom Staff Pension Scheme Board of Trustees Chairman Joseph Ogutu said that Crystal Rivers Mall is now expected to be ready for occupation and open for business in mid- 2017 with about 30 per cent occupation already booked.

“Today, we see many of Nairobi city residents, including many of my colleagues, moving to the peripheral of the city in search of the perfect living space for our families. We have seen tremendous population growth in Syokimau, Athi River, Kitengela and even Embakasi. More industries and businesses continue to come up here in line with our growing economy, most notably, the Standard Gauge Railway station. As the population of these regions continues to grow, and as our children grow, there will be demand for sustainable living, recreational and working spaces,” explained Ogutu.

The townhouses and apartments are set to be complete by 2018 with already 10 per cent occupancy. Apartments will retail at Sh 8 million while the townhouses will retail from Sh14 million. The mall will accommodate at least 1000 vehicles while introducing SMART CITY installations for integrated internet and WIFI Internet access.


In total, the mall provides for the largest single parking area in the County with 700 spaces on both the lower ground and upper ground floors. In addition to Crystal Rivers, the Safaricom Staff Pension Scheme is also investing in Mandharini, an award-winning luxury development in Kilifi County.

Source; https://www.capitalfm.co.ke/business/2016/12/safaricoms-sh4-3bn-machakos-real-estate-project-to-open-in-6-months/

Tuesday 1 November 2016

Bad loans put Shelter Afrique boss in eye of a raging storm

Mr James Mugerwa, Shelter Afrique’s managing director. PHOTO | FILE 
By DAVID HERBLING, hdavid@ke.nationmedia.com

Posted  Monday, October 31   2016 at  18:54
Source; http://www.businessdailyafrica.com/Corporate-News/Bad-loans-put-Shelter-Afrique-CEO-in-the-eye-of-a-raging-storm/539550-3436558-item-0-o4t6s3z/index.html
Top managers at pan-African housing financier Shelter Afrique have been thrown into the eye of a storm after documents emerged showing massive looting of funds through creative accounting and subprime lending that is now under investigation.
Documents seen by the Business Dailyshow that the company’s managing director, James Mugerwa, has been dishing out subprime mortgages to unqualified borrowers resulting in a steep rise in the company’s non-performing loans.
At least 59 per cent of Shelter Afrique’s $246.3 million (Sh24.63 billion) loan book was classified as non-performing by February 2016, according to documents addressed to the lender’s board of directors and financiers.
Jean Paul Missi, chairman of the Shelter Afrique board, acknowledged receipt of the documents and promised appropriate action.
“The board asserts that the allegations are taken seriously and will give them appropriate attention,” he said, adding that the organisation is committed to complying with the highest international standards, best practices, and its policies.
The documents show that Shelter Afrique has been restructuring overdue loans by rescheduling such facilities to appear and making them appear as performing, effectively suppressing the volume of toxic mortgages.
“The loans are restructured multiple times to ensure they are not classified as non-performing and are therefore hidden NPLs that are not disclosed,” information sent to the board dated September 8, 2016 says.
Shelter Afrique is also said to be borrowing to pay debt and not to finance new investments or lending, turning it into a pyramid or Ponzi scheme.
Kenyan taxpayers control 10.63 per cent of Shelter Afrique, which is owned by a total of 44 African countries together with the African Development Bank and African Reinsurance.
Housing and Urban Development principal secretary Aidah Munano represents Kenya on the Shelter Afrique board. The PS, however, refused to answer any questions on the alleged irregularities despite the fiduciary duty she owes the taxpayers. 
Mr Mugerwa is also accused of presiding over a creative accounting regime that has subdued provisions for bad loans, and refused to provide sufficient impairment for the $4.1 million Shelter Afrique had in the collapsed Chase Bank.
Consulting firm Deloitte has been hired to carry out a forensic audit as well as replace Ernst & Young as Shelter Afrique’s external auditor.
The list of Shelter Afrique’s big debtors includes Nairobi’s Taj Mall, Translakes Estate in Kisumu, Eden Beach Resort in Shanzu, and Oakpark Properties’ Pine City in Athi River.

Consequently, Shelter Afrique has seized 11 apartments at Eden Beach, 17 houses and land belonging to Oak Park under an “asset swap programme” and has classified these properties as “held for sale.”

Mr. Mugerwa is further accused of wasteful and questionable spending that has seen him vary by more than three-fold the cost of repairs at his residence, splurging more than € 30,000 on house furniture which internal auditors couldn’t trace, making double per diem for foreign trips, buying six smart phones in eight months, and arbitrarily sacking junior staff.

The Shelter Afrique boss’ profligate spending is evidenced by the Sh739,010.14 phone bill he incurred in the month of May 2015 for one of his mobile phones, according to a postpaid bill from Safaricom.
Mr Mugerwa — who took office in August 2014 after the acrimonious exit of Alassane Ba — did not respond to questions on the state of the company’s finances.
Ernst & Young, who have been the external auditors at Shelter Afrique for the last five years, also declined to respond to questions of professional misconduct in handling the lender’s books.
Shelter Afrique enjoys diplomatic status and is not regulated by any authority – meaning it has no legal guidelines on capital adequacy, risk management and corporate governance. 

Tuesday 18 October 2016

Kenya poised for another first in mobile money revolution

Kenya is poised to enter a new mobile money economy era, judging by the steady rise in cashless transactions for goods and services.A new study by consultancy firm Deloitte says Kenya is ripe for a mobile money revolution and urges local businesses to align their sales models with the emerging reality to stay ahead of the competition.The impending mobile payments revolution marks yet another first for Kenya, which has been a front-runner in mobile payments backed by innovations such as mobile money transfer service, M-Pesa.The Deloitte report says the continued uptake of mobile payments by consumers has reached a critical point where it is posing a threat to traditional retail models based on cash payments.

The study found that 11 per cent of Kenyan consumers are already using mobile payments – more than five times Nigeria’s two per cent, nearly three times South Africa and Uganda’s four per cent and ahead of Zimbabwe’s seven per cent.The figures represent only transactions paid for using mobile money, and excludes mobile money transfers.

The Deloitte study also found out that Kenya remains way ahead of its African peers on the use of mobile money transfers. The study found that 33 per cent of Kenyans are making mobile transfers compared to Nigeria’s 11 per cent, South Africa (15 per cent), and Zimbabwe (11 per cent).Kenyan consumers were also found to be adopting mobile money faster than their African peers, placing the country in pole position to becoming the region’s first digital economy. “The level of adoption of these services is currently low and the gap represents a significant monetization opportunity for operators,” the Deloitte report says, adding that 50 per cent or more of the mobile phone users had demonstrated a willingness to go cashless.

The report urges businesses to tap the anticipated mobile money opportunities by investing in understanding consumer behaviour to stay ahead of the competition. “The holy grail of retail right now is understanding shopper behaviour live. As they move around you want to impact their decision to buy while they are in the store,” Deloitte Advisory Leader for East Africa Rodger George said when he released the report on consumer trends.

Prof George, who is also a visiting professor at the University of Cape Town’s Graduate School of Business , said Kenyan businesses must do more to tap into the huge opportunities that are emerging in the mobile phone economy. Use of mobile phones has become an integral part of Kenyan lives, a development that is confirmed by the fact that they interact with the devices more than other users in any African country.

The study found that 71 per cent of Kenyans look at their phones within five minutes of waking up with a further 53 per cent looking at their phones before sleeping. Besides, 40 per cent of Kenyans use their phones in public transport while 28 per cent use the devices while watching TV.
Retail Trade Association of Kenya chief executive Wambui Mbarire urged retailers to align their business models with the emerging reality. Tifa Research director Maggie Ireri said businesses that fail to adopt the changing model risk losing out to rivals or perish altogether. “The widespread use of mobile phones will have a profound effect on ways businesses operate, making it imperative to respond accordingly,” she said.

The opportunity to tap mobile phone use is expected to increase as more Kenyans adopt smartphones backed by strong economic growth as operators increase their investment in mobile data networks. “As smartphones become ever more embedded in our lives, we see new opportunities and challenges for the mobile sector, retailers and advertisers,” said Deloitte. Some 53,000 respondents across 30 countries, including South Africa, Nigeria, Kenya, Uganda and Zimbabwe were surveyed.


Source;  http://www.businessdailyafrica.com/-Kenya-ahead-of-rivals-as-African-retail-goes-digital/539552-3421704-item-0-y8rh1v/index.html

Sunday 19 July 2015

Developers target low-cost home buyers on Mombasa Road

IN SUMMARY
·         Rogam Investments, Karibu Homes and Peninsula Development offer Sh1 million houses.
·         The developers are pitching to buyers that the monthly mortgage payments for the units are equivalent to their current rent.
By JOHN GACHIRI, jgachiri@ke.nationmedia.com

Three real estate developers are building low-cost houses along Mombasa Road targeting first-time buyers with prices starting at Sh1 million per unit.
The developers — Rogam Investments, Karibu Homes and Peninsula Development Company — are pitching to buyers that the monthly mortgage payments for the units are equivalent to their current rent.
At an interest rate of 15 per cent per year, a Sh1 million house would require Sh12,000 a month for a 20-year mortgage while a Sh2.5 million house would require Sh31,000 a month at the same interest over a similar period.
Rogam Investments is undertaking the project as a mixed development of studios and apartments in Mlolongo, Machakos County. The project, dubbed First Homes, has a sale value of Sh500 million.
The firm said that it was aiming at attracting first-time home buyers such as working recent graduates.
Mr Aaron Gitonga, a director at Rogam Investments, said the firm chose to serve the low-end market because it is under-served unlike the high-end one which has signs of saturation.
“This is a market where there is a lot of demand but not many developers are looking at it,” Mr Gitonga told the Business Daily.
First Homes has studio apartments that go for between Sh1.5 million and Sh2.7 million, one-bedroom units at Sh2.5 million and two-bedroom ones at Sh3.6 million.
Rogam Investment began building homes in January last year and the first ones are expected to be ready for occupation by September.
The firm is financing the project through a mix of equity and loan from Co-operative Bank.
Availability of less costly, large tracts of land is the main reason attracting developers to Mlolongo and neighbouring Athi River towns. A large pool of employees from factories and offices along Mombasa Road and the Export Processing Zone is another reason.
Karibu Homes is putting up a Sh3 billion estate in Athi River. The apartments are priced at between Sh1.6 million and Sh5.25 million. The estate will have 1,082 units.
Peninsula Development Company plans to roll out apartment blocks worth Sh1.5 billion by the end of this year targeting first-time home buyers with units costing from Sh1 million. 
The firm has a mixed development in Mlolongo and another one on Ngong Road, also targeting first-time buyers.
Mr Gitonga said that land prices are the biggest barrier to putting up more low cost units. “The price of land should be less than 10 per cent of the total construction cost,” said Mr Gitonga. Currently the price is about 25 per cent of the overall cost of a project. 
Property consultants say that land prices are still on the rise in most satellite towns.

http://www.businessdailyafrica.com/Developers-target-low-cost-home-buyers-on-Mombasa-Road/-/539552/2798810/-/lgwse0z/-/index.html


Tuesday 7 July 2015

Foreign billionaire investors seek a slice of Kenya

By Sheila  Kimani


The thriving real estate sector is attracting foreign investors from across the world as they seek to capitalise on the country’s strategic location as a regional business hub. Mukesh Ambani When Delta Corp sold two prime properties in Nairobi, few people connected it to India’s richest businessman, Mukesh Ambani. The 53-year-old tycoon made Sh2.5 billion from the deal in Kenya in which he sold Delta Centre in Upper Hill to the World Bank and Delta Towers in Westlands to University of Nairobi Staff P
ension Scheme and PricewaterhouseCoopers. Ambani has been slowly upping his interest in East Africa, with his company, Reliance Industries, working alongside the Delta Corp East Africa Limited. In mid-2013, Business Daily reported that he had acquired ten prime plots in Nairobi valued at Sh2.9 billion that are to be used for commercial and residential development. In February 2014, the same paper reported that Mukesh Ambani had reported another gain of Sh189 million from part-sale of his Kenyan real estate holdings.  A month earlier, Delta Corp chief finance officer Hardik Dhebar was quoted as saying that real estate projects in Kenya had returned Sh2billion profit.

Aliko Dangote Coming to Kenya in the entourage of Nigeria’s former president Goodluck Jonathan in 2013,  Aliko Dangote felt certain that in three years, his company would be one of the dominant cement producers in Kenya. He revealed plans to build a $400 million cement plant. “We have realised that if we really want to do something big in East Africa, we must operate in Kenya. We believe that in the next two and half years, we will be the dominant player in cement in Kenya,” Forbes quoted him saying at the time. With the likes of Bamburi Cement and Athi River Mining already holding the largest market share, he knew it would not be easy for him to penetrate the Kenyan market. However, owing to his reputable Dangote Cement business, which is the largest cement manufacturer in Africa with stakes in nine African countries like Tanzania and Ethiopia, there was a chance that his entry into the Kenyan market would be a game-changer.Two years on, the cement plant is yet to be as it faces opposition from different quarters.

Adil Popat has worked in different sectors like motor vehicles and hospitality. His interests in the hospitality sector saw him work with top franchise Kempinski to bring business travel and luxury to Kenya, in the form of Villa Rosa Kempinksi. Years after working with top hospitality brands like the Hilton Hotel, witnessing how other top brands had succeeded in Kenya and even starting his own hotel franchise — Ocean Basket — Popat’s partnership saw a transformation in the Kenyan hospitality industry. Apart from Villa Rosa Kempinski, his firm’s focus has seen him expand under the Acacia brand to Acacia Premier Kisumu, a four-star hotel located in the leafy Milimani suburb and offers views of Lake Victoria, the 168-room Acacia Premier Nairobi, as well as many other investments that run into millions of shillings.

Richard Branson Owing to the Maasai Mara’s wildebeest migration that made it the Seventh Wonder of the World, Virgin Atlantic’s billionaire CEO Richard Branson chose to invest in Kenya’s tourism, specialising in luxury camps. With an already buzzing airline company, Sir Branson proudly announced that he would be opening a luxury game camp next to the Maasai Mara Game Park as it would be in line with the tourism and travel industry. Yet again, this would be a familiar venture given his South African reserve that has been in business for over 20 years. Following in the footsteps of his Ulusaba private game reserve located in the Sabi Sands in South Africa, the Kenyan luxury safari camp dubbed Mahali Mzuri boasts a 15-tent luxury camp whose rates are about $590 (Sh50,740) per person per night.


Read more at: http://www.standardmedia.co.ke/lifestyle/article/2000166060/foreign-billionaire-investors-seek-a-slice-of-kenya?pageNo=2

Wednesday 28 January 2015

Kenya: What the Law Says About Property Ownership

Property in Kenya can take many forms. It can be movable or immovable. Article 260 of The Constitution provides that "property" includes any vested or contingent right to, or interest

in or arising from--

(a) land, or permanent fixtures on, or improvements to, land;

(b) goods or personal property;

(c) intellectual property; or

(d) money, choses in action or negotiable instruments;

As such property never floats around without an owner. The owner can be a person or a group. It's no wonder we have documents that are used as proof of ownership of property like log books, title deeds and so on.

When alive, land is usually registered in the names of real or juristic persons.

The Constitution extends a protection and a guarantee of right to own land under Article 40. (1) Subject to provides that every person has the right, either individually or in association with others, to acquire and own property--

(a) of any description; and

(b) in any part of Kenya.

Property can be owned by spouses jointly or separately. The fact that property is registered in the name of one spouse does not mean that it is owned exclusively by one spouse. The Matrimonial Property Act provides that a spouse shall at all times have an overriding interest in matrimonial property. The spouse in whose name the property is registered is deemed to hold the property in trust for the other spouse.

The right over property comes to an end upon the demise of the person in whose name it is registered. A dead person cannot own land.

The law of Succession Act regulates the process that the ownership of property is expected to flow through from the deceased to the living. The change of the ownership from the deceased to the living is done through wills in case the deceased had prepared one.

Such a person is said to have died testate. The person who makes a will is known as the testator. The distribution or the general handling of the property they leave behind is regulated by the wishes that testator had expressed in their will. The Testator has to appoint a person known as the executor who will be tasked with the responsibility of implementing the desires of the testator.

Majority of us Kenyans, do not prepare wills. In the event that one dies leaving no will behind, then the Law of Succession Act provides that such a person has died intestate. In the event the deceased had property, then the person who is recognised by the law of succession as eligible must apply for letters of administration. The property left behind by the deceased is known as the estate.

In Kenya, dealing with the property of the deceased without letters of administration is illegal/a court order. Many people dispose of, distribute, and transfer the property of the departed loved ones without letters of administration out of ignorance. This is known as intermeddling.

Letters of administration are court orders that appoint an administrator who stands in for the deceased for purposes of collating the assets, liabilities, debts owed by /owed to the deceased. He has the task of paying off debts and distributing the property left behind by the deceased to the beneficiaries.

It must be noted that the administrator so appointed by the court is not the new owner of the property of the deceased. The administrator has to report back to the court that he has completed the task of distributing the estate of the deceased.

The letters of administration granted by the court can be challenged by an aggrieved party who can even apply to the court for the revocation of the grant. This happens for example when the there is a conflict of interest between the administrators role and the beneficiaries or where the administrator is mismanaging the estate or is incapable of rendering an account of the activities of the estate.

The death of administrator does not bring closure to the process. A new one can be appointed by the court to complete the tasks that are pending. An administrator who is incapable of performing his duties can be substituted with another one.

Always remember that it is illegal to deal with the property of a deceased person unless you have a court order. Ignorance of the law is not and will never become an excuse.

By John Chigiti
http://allafrica.com/stories/201501071253.html 

Tuesday 21 October 2014

Karen land saga a stark reminder of dark past

Once again Kenyans are being treated to scenes of accusations and counter-accusations regarding corruption that have predictably taken a political twist. On one side is the Coalition for Restoration for Democracy (CORD) and on another side are politicians and Members of Parliament from the Jubilee-led government.

But before Kenyans allow themselves to once again get lost in the politics that often overshadows claims of big corruption (Anglo Leasing, Standard Gauge Railway, Lamu) we need to pause and reflect on what the latest scandal says about our respect for the rule of law. Two questions come to mind. One is the sanctity of legal documents like the title deed. Are such documents safe from corrupt politicians and businessmen?
This is not the first time that court orders are being selectively followed since the new constitution was promulgated four years ago. It sets a dangerous precedent in the country. The Constitution not only spells out the country's bill of rights and laws of the land, it is also supposed to be the arbiter that ensures that the powerful do not ride roughshod over the weak.

The fact that a select group of individuals can take it upon themselves to violate the country's sacred laws because of their insatiable greed should worry all of us. This does not exclude government because it is in place by virtue of the same law. The new allegations of high level corruption and impunity in government should prod the executive, the legislature and the judiciary to smoke out the individuals who are hell-bent on subverting our governance system.

If such impunity is allowed, a dangerous precedent will be set and this is risky as it has the potential reverse the gains that the country has made in cleaning its institutions over the last 15 years. The Karen land circus unfortunately reminds us there is a time when impunity ruled our land. That there is a time powerful and connected people could grab property and get away with it. This should not be allowed to happen again.


Read more at: https://www.standardmedia.co.ke/article/2000138923/karen-land-saga-a-stark-reminder-of-dark-past