Having seen how Covid-19 has ravaged the economies of the world, we can only be optimistic of good things in 2021. All sectors of the economy suffered directly and indirectly as a result of cov9d-19 pandemic.
With the New Year, what can we expect in real estate sector? How do you see real estate project being funded? Will banks relax financing regulations for construction loans? These are some of the questions I subjected an expert in real estate sector to try get a clear picture of New Year.
According to Mr. Benard Omondi, Managing Director of West Kenya Real Estate Ltd, there are a lot of reasons to be optimistic about next year. Economies tend to pick strongly after a setback and this is good for real estate. Companies tend to hire again, open new offices, expand office spaces and those in manufacture tend to produce more goods in anticipation of growth.
Mr. Omondi said that this trend will see more people seeking for funding to carry out construction projects and one key source of financing to benefit will be joint venture Kenya. Those keen in going for joint venture projects will have more than enough projects to invest in.
Joint Venture tends to remove or eliminates the hurdles that come from the traditional financing institutions. In a joint venture arrangement, both parties share risks and return in agreed ratio. Those who earned in 2020 or had put together funds to invest in 2020 and did not due to the prevailing environment will go out to invest.
Omondi also said that the fact that companies are likely to hire more, open new branches as well as manufacturing and distributors looking for new spaces will drive demand up. This will trigger investors to embark on new construction projects. This will also attract joint venture investors.
“As a property owner, if you experience shortage of rental spaces and you have a land strategically location in town, chances is you will look for ways to develop it to cash on demand, Omondi said”
This will also be good news for those whose properties have stalled due to funding. They will benefit from those ready to do a joint venture to see the property completed.
As a parting to the investors, Mr. Omondi cautioned those going into joint venture to thoroughly conduct due diligence as cases of lands being reclaimed are on the raise.
“We have witnessed a growing trend from Kibaki government to the current one where lands are being claimed back by either National or County governments. Therefore, it’s absolutely important that those going into joint venture must spend in doing thorough due diligence to authenticate the validity of a title and any possible encroachment on public land”
As you look forward to the New Year, think about joint venture Kenya opportunities. It could be the key to unlocking your construction funding you have been looking for.