In Summary
  • Cytonn investments said residential sector remained flat at 4.9 per cent during the same period under review.

  • Some of the counties notorious for delaying the processing of documents include Nairobi, Kisumu and Kiambu.

The real estate sector performance slumped in the third quarter of this year with rental yields in the commercial office and retail sectors dropping by 0.1 per cent and 0.2 per cent respectively.

According to an investment firm Cytonn investments, residential sector remained flat at 4.9 per cent during the same period under review.

This slump in the multimillion-shilling investment segment has been attributed to delay in the processing of construction permits by some of the county governments.

E-PERMIT

Some of the counties notorious for delaying the processing of documents include Nairobi, Kisumu and Kiambu.

 “The delays have mainly been as a result of the e-permit system downtime, inadequate staffing and suspension of planning committees of the Nairobi, Kisumu, Kiambu and Mombasa county governments,” said part of the report.

Currently, construction permits in Kenya can take as long as two years and this has greatly affected Kenya’s rank in the global Ease of Doing Business Index by the World Bank.

By the end of 2018, Kenya’s rank dropped from 128 to 124 in the previous year in terms of ease of obtaining construction permits.

“This largely due to lack of improvements on the system, and the situation has only worsened in 2019 and thus we expect Kenya’s rank in 2019 to drop further,” added the report.

Industry players such as the Architectural Association of Kenya (AAK) and the Kenya Private Developers Association (KPDA) have called for an immediate resolution of the matter.

AFFORDABLE HOUSING

“This is critical as the government attempts to deliver the affordable housing initiative through public-private partnerships. Delays in approval system leads to unnecessarily high development costs for private developers,” states Cytonn report

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