Leading Property Portal looks at the impact of Infrastructure Development on the Real Estate sector
A series of infrastructure developments that aim to boost Kenya’s economic growth are expected to further bolster the country’s real estate market, according to analysis by leading real estate portal Lamudi.
The government has embarked on massive infrastructure developments that are geared to bolster the economy of the country. The developments – which involve transport, energy and information and communication sector – are also expected to facilitate the growth in the real estate sector.
The widespread growth of the real estate sector will influence other sectors like construction and industrial development. The business will be booming due to the increased number of construction contracts in the industry.
Competition between different contractors will also cause an increase in standards and quality of services and products. Contractors dealing with various services will even thrive in this development: a roofing contractor, road construction contractors, and among others, will get a chance to flex their muscles in the market with their service and products.
There will also be an increase of service providers, warehouses, and merchants in the market. It will also curb unemployment in the country since there will be an increased demand for the workforce. As a result, it will affect the country’s revenue and economic position.
The government is now focusing on renewable energy with the injection of 280 megawatts (MW) of geothermal power into the national grid, Kipeto wind farm in Kajiado and the coal project in Lamu and Kitui, which will provide 5000 MW of green energy by 2030. This will enable the provision of affordable electricity which will enhance the growth of businesses resulting to an increased demand for commercial spaces.
The 7.4 billion project that was started by the president early this year in Embakasi is set to change transport in the area. This will result in more people moving to the area and the properties around the area increasing in value. Infrastructure development is vital for the growth of the real estate market. The developments open up latent areas, creating more opportunities for the sector.
There has also been many developments along the Thika Superhighway which is almost half an hour drive from the Central Business District (CBD). Some of the developments include estates like Bahati Ridge, Thika Greens, Chania Gardens, Kivulini and Buffalo Hills Leisure and Golf Village.
Lamudi Kenya Managing Director, Dan Karua, said: “Infrastructure development will greatly impact the real estate sector, delivering positive earnings growth due to strength in the underlying fundamentals. These developments will also facilitate the provision of clean and sustainable energy that will improve the reliability of the electricity supply, thus enhancing industrialization.”
With the growth in industrialization, the need for more commercial spaces will increase, leading more multinationals to set up base in the country. These will further bolster the commercial property market of economic hub of East Africa due to the increased private sector investments.
Property values in remote areas also expected to benefit from infrastructure development. The ongoing construction of road infrastructure will enhance accessibility to remote areas, opening up the property markets in these areas to investors. The tarmacking of 10,000 kilometres of roads in the country will open up areas and create more investment opportunities. The Northern bypass from Limuru to Mombasa Road opened up the areas along the road. Prior to construction of the bypass, land in the area was relatively cheap, with a quarter an acre costing less than one million shillings. ow the same piece of land goes for close to ten million shillings. The ongoing standard gauge railway will also open up the areas along its route, as will the Lamu Port and South Sudan Ethiopia Transport in the northern corridor.
Launched in 2013, Lamudi is a global property portal focusing exclusively on emerging markets. The fast-growing platform is currently available in 32 countries in Asia, the Middle East, Africa and Latin America, with more than 800,000 real estate listings across its global network. The leading real estate marketplace offers sellers, buyers, landlords and renters a secure and easy-to-use platform to find or list properties online.