Category Archives: ideaexchange

Nairobi Real Estate Moment: 2021

  • The Nairobi Expressway construction that will span from the Jomo Kenyatta International Airport to Westlands, has reached downtown Nairobi and is causing disruptions to real estate and traffic .. some changes to retail include..

  • Changes to Malls – many of which are largely idle above the first floor. Quite a bit of foot traffic there is from bank customers visiting their branches which have now been relocated to the third and fourth floors of Nairobi malls.

Other real estate stories.

  • An EFG Hermes report on Nairobi real estate found the demand for affordable houses has a disconnect that has seen prices are softening in Nairobi – at high-end residential (-27% below 2017 peak), and commercial properties (-13% off-peak). Also, the tough Nairobi office market is very visible (vacancy rates of 22% compared to 9% in 2011) with exposure to some financing banks including KCB and Housing Finance.
  • Orbit Group and Grit Group have partnered on a 25-year $53.6 million sale & leaseback transaction for a light industrial (warehouse and manufacturing) property on Mombasa Road, supported with a $25 million loan from the IFC. Orbit Products Africa, controlled by the Sachen Chandaria family, is a leading contract manufacturer for brands in personal care and home care products and its clients include Reckitt Benckiser, Unilever, Colgate and Henkel. They will expand the plant by an additional 14,741 m2 warehouse space and improve it to modern FMCG industry standards to achieve an IFC EDGE green building certification on completion. As part of the deal, $31.5 million will be a “perpetual note”, raised from Ethos Mezzanine Partners GP and BluePeak Private Capital and additional proceeds from this will be invested in the St Helene Private Hospital in Mauritius, an idea that was conceived by Catalyst Principal Partners. Grit Real Estate Income Group is listed in London and Mauritius 
  • A Knight Frank report, the “Africa Logistics Review” finds that Nairobi had the best real estate market between 2018 and 2021 for prime warehousing and logistics.  “Nairobi recorded the highest increase in average prime rents across Africa, from USD 4.70 psm in 2018 to USD 6 psm ” – and developers have grown over 170,000 square meters in the last five years. Kenya has the highest concentration of special economic zones (SEZ) in Africa (61 of the 180 SEZ’s). The country is also making good progress to grade A warehousing and in growing a real estate investment trust (REIT) ecosystem.  Also because of high land values in Nairobi, developers have sought towns/areas beyond traditional industrial hotspots Read more.
  • Speaking of REITs .. Acorn Project (Two) LLP, the Issuer of the Acorn Medium-Term Green Note (MTN) Program, closed the final tranche on 16th July 2021, raising Kshs 2.096 billion against the target of Kshs 1.438 billion representing a subscription rate of 146%.  As part of this transaction, the Acorn green bond was converted into the Acorn Student Accommodation Development REIT (ASA D-REIT). Read more.
  • The Architectural Association Of Kenya reported on development challenges within the Nairobi metropolitan area. A decade after an electronic construction-permitting system covering Nairobi, Mombasa, Kiambu, Machakos, Kisumu, Kajiado and Kilifi was deployed with the support of the World Bank Group, it is plagued by frequent disruptions and system downtime. In Nairobi, the system has not been operational for more than three months of 2021 and in a survey of AAK members, 46.7% of the respondents indicated that they had to wait for over 6 months for their applications to be processed or granted approval.
  • Kenya’s Lands Ministry is doing a digitization of title deeds through a National Land Information System (NLIMS), referred to as ArdhiSasa with a goal to have all land records digitized by the end of 2022.  The Lands Cabinet Secretary indicated that the Ministry has scanned and digitized 30 million documents in Nairobi.
  • A Cytonn Real Estate report on properties in the years 2020 found that “residential units in Thindigua, Syokimau and Rosslyn recorded the highest returns to investors and land asking prices recorded an overall annualized capital appreciation of 2.3%.” According to the report, Gigiri was the best performing office node in FY’2020, followed by Westlands and Karen, In the retail sector, Westlands and Karen were the best performing nodes while in hospitality, Westlands-Parklands was the best performing node. Read more in the report.
  • Cytonn is now doing a restructuring and has applied to wind down two funds – the Cytonn High Yield Solutions LLP and Cytonn Real Estate Project Notes LLP through administration and has invited creditors to submit their debt claims, with proof, to Kereto Marima who is the appointed administrator – by November 29, 2021.
  • Hotels are not doing well with many iconic sites closed or on sale due to Covid-19 and the resultant curfews and travel bans that have affected the flow of tourists into Kenya.
  • Many hotels expect a steady recovery once the curfew is lifted (which happened in October 2021). See a survey of hoteliers by the Central Bank of Kenya.

Some hotels that are gone: Intercontinental and the Nairobi Dusit/ D2 which recovered after the January 2019 terror attacks only to succumb in the Covid-19 aftermath.

Some hotels currently closed: Mt Kenya Safari Club, Norfolk, Radisson Blu.

Some hotels on sale: Outspan, Treetops (should the Queen buy the hotel ahead of her 100th birthday?), Fairview and Country Lodges, Jumuia (Nakuru).  

EFG Hermes launches online trading in Kenya

Kenya’s leading stockbroker, EFG Hermes has launched One, a new online platform that enables retail investors to trade shares on the Nairobi Securities Exchange (NSE).

EFG Hermes One, the equities trading platform will be available to clients of the stockbroker. The One app has been very successful in other markets, notably in Vietnam and the firm hopes to capitalize on the high mobile phone density in Kenya, reported at 108%. 

Speaking at the launch, the CEO of the NSE Geoffrey Odundo said that Kenya has an active retail investor base as seen with M-Akiba, a government bond issued and traded on mobile phones that drew 500,000 investors. He added that the new NSE platform has the ability for “day-trading” and “short-selling” and those would be products that appeal to retail investors.

Muathi Kilonzo, Head of Equities at EFG Hermes Kenya said that retail investors across the globe showed great activity in powering different equities and investments markets while the world was slowed by Covid-19.

Ali Khalpey, the CEO of Frontier Markets, said EFG Hermes started in Egypt 35 years ago and had grown to have 5,500  employees and offices in Egypt, Dubai, Nigeria, Kuwait, USA, Oman, UK, Kenya, Jordan, Saudi Arabia, and Pakistan offering stockbroking, investment banking, asset management, securities brokerage, research, and private equity services.

In 2017, EFG Hermes launched a greenfield operation in Kenya that has grown to be the top stockbroker by value traded on the Nairobi Securities Exchange in 2021. Last year it was acclaimed as the top frontier research institution and the best broker in Kenya and Nigeria. It produces highly prized research reports on frontier markets with recent ones on Kenyan banks, the silicon savannah potential and digitizing COVID-19 stimulus initiatives.

Download the One app from the Apple app store and Google play store, register to be an EFG Hermes client, and get on board after a regulator-mandated, know-your-customer (KYC) process.

Idea Exchange: Antler, Forbes, Museums, ODM.

New, and ongoing, opportunities to apply for.

  • As part of their one-year anniversary celebrations, Absa Kenya has invited people to write in on “Wall of possibilities” of community-uplifting things that they would like to Bank to fund. Each idea may get up to Shs 2.5 million and the deadline is 5 March.
  • Antler Global is seeking new startup companies to support with funding and mentoring. The Nairobi deadline is in April, and here’s a glimpse of the 2020 cohort at Antler.
  • Nominate the Woman Entrepreneur You Admire Most to the COMESA 50 Million African Women Speak Platform.
  • DFC, the U.S. International Development Finance Corporation is offering financing of between $3 million and $50 million to African companies in support of the continent’s COVID-19 recovery – via Asoko. 
  • The Forbes Africa 30 Under 30 Class of 2021 in categories for creatives, sports, and business and technology.  Deadline is March 31.  
  • Apply for the 2021 Global Teacher Prize ($1 million) and the new sister award, the Chegg.org Global Student Prize ($50,000). Deadline is 30 April.
  • The Hack the Normal hackathon takes place between 5 – 7 March 2021, invites participants to develop new products, services and business models with commercialization potential in these businesses and create solutions for financial challenges, sustainable living and healthy living.
  • The new Kikao64 co-working hub at Eldoret has 50% discount for non-profits, athletes and startup businesses, while others who sign on through the end of April 2021, get discounts of 25%.
  • The Konza innovation challenge offers $5,000 of funding for startups to pilot their innovations at the Konza Technopolis. Deadline is March 19. 
  • edit The Communication Authority of Kenya 2021 Kuza Awards rewards excellence in broadcasting. Regulatory awards are for compliance, local content, children & broadcasting, regional broadcaster, upcoming broadcaster and copyrights. Also, People Choice awards for favorite radio station, TV station, pay TV, news Radio station and TV station. This year has a theme for “Preserving our Heritage through Broadcasting (Kenya a Heritage of Splendour)”, and there is a Patriotic Award category with awards for Uzalendo Award (airing announcements on Covid-19) and Mzalendo Mkuu Award (educational content). SMS Kuza to 15601 to vote for free.
  • Mask Art awards are open to schools and young people under 25 in categories of the school of the future, young entrepreneur and environmental activist. Deadline is April 1.
  • The East Africa Maritime Awards (EAMA) recognize and award notable users of the Port of Mombasa. Organized by the Kenya Ports Authority, it is open to shipping, ports, services, engineering, and leisure marine industries with operations in Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, and the Democratic Republic of Congo (DRC).  The deadline has been extended to March 31.
  • edit From the MasterCard Foundation comes the Baobab’s Got Talent challenge, an exciting storytelling opportunity for young creatives (animation, graphic design, video production) in Africa. Deadline is March 15.
  • From MIT Solve, the 2021 Global Challenge and Solve’s first US Challenge on Antiracist Technology are now open. Anyone anywhere can submit a solution to become part of the 2021 Solver class and access more than $1.5 million in funding.
  • The National Museums of Kenya is seeking historical memorabilia on Kenya, from the year 1800. The items, including photos, film, memorabilia, weapons, musical instruments, farm tools, art, newspaper cuttings, passbooks, etc. can be donated or shared on a long-term loan basis. The deadline is 19 March.
  • For the presidential candidate at ODM, the party is seeking a committed, passionate disciplined and dependable party member who can mount a successful campaign. The entry fee is Kshs 1 million and with a reduced amount of Shs 500,000 for women, youth or persons with disabilities. Deadline is 31 March. 
  • Post Office boxes are available across Kenya. Pick one up by March 31 and get a 30% discount.
  • edit SEED, the Stanford Institute for Innovation in Developing Economies, partners with entrepreneurs (CEO’s / founders) in Africa and South Africa emerging markets to build thriving enterprises that transform lives. Applications deadline is April 15.
  • edit The Eastern and Southern African Trade and Development Bank (TDB) and Asoko Insight have launched a Renewable Energy DealRoom to accelerate the financing of renewable energy projects in the region served by TDB.
  • The Thunderbird School of Global Management is offering a unique scholarship for Africans to attend the online Masters of Applied Leadership & Management with a specialization in Public and Global Affairs starting on March 8, 2021. African students will pay a special tuition of $12,000, compared to $33,000 for other students, representing a scholarship of $21,000.
  • The Tony Elumelu Foundation has the seventh round of its entrepreneurship program in which, with partners, they are seeking to boost 1,0000 businesses and also assist others to recover from Covid-19. This year, 1,000 businesses will receive $5,000 in seed capital, business training, mentorship, and global networking opportunities.  Apply before March 31. 
  • edit The Visa Everywhere Initiative targets fintechs to join a global innovation program. Apply by May 7.
  • edit Nominations for the Africa Food Prize 2021 are ongoing, a $100,000 celebration of African agriculture achievers.

FT best business books 2020

The Financial Times staged their best business book awards for 2020 today, and in the 16th year of the series, the event was held virtually. The nominated books were about a diverse rangeof subjects including capitalism, Instagram, Netflix, Oil & Saudi Arabia, decision-making, inequality, futurism, empowering women, automation, data-mining, and market crashes.

For 2020, the award went to “No Filter: The inside story of how Instagram transformed business, celebrity and our culture” by Sarah Frier.

Interviewed after the award decision, Frier said after years of reporting about social media companies, she realized that their products were becoming the infrastructure of society so it was important not to look at them as just business stories. She wins $30,000 and the runner-ups will get $10,000.

No Filter finished ahead of Death of Despair by Anne Case & Angus Deaton, Reimagining Capitalism by Rebecca Henderson, If Then (How the Simulmatics Corp. Invented the Future), by Jill Lepore, A World Without Work by Daniel Susskind and No Rules Rules (Netflix) by Reed Hastings & Erin Meyer.

Other shortlisted books were Samsung Rising by Geoffrey Cain, Winning Now, Winning Later by David Cote, Uncharted by Margaret Heffernan, Blood and Oil by Bradley Hope & Justin Scheck, Radical Uncertainty by Mervyn King & John Kay, Trade Wars are Class Wars by Matthew Klein & Michael Pettis, Money for Nothing by Thomas Levenson, The Double X Economy by Linda Scott and Flash Crash by Liam Vaughan.

Also awarded was the Bracken Bower Prize for next generation of authors, with the $15,000 prize going to a book proposal called New Money by Stephen Boyle.

The Creative Sector in 2020

The Africa Digital Media Foundation (ADMF) has published a comprehensive report on the state of the creative sector in Kenya and the needs, challenges, and ambitions of its participants. ADMF started the study with a questionnaire that was widely circulated and completed the research in July 2020 using online forums and tools.

Summary of their findings:

  • There is a willingness in the Kenya creative entrepreneurs to make things better for everyone.
  • Success breeds success and the creative population is divided between those that have made it (and keep grabbing jobs and clients) and those that have not (less- established creative entrepreneurs who may have few years of experience, little commercial and financial success)
  • All want opportunities to learn more; they accept that technology evolves and new products require new skills.
  • Banks don’t understand; formal credit and financing options aren’t considered viable options by creatives; their financing is limited to sourcing from friends and family.
  • Almost everyone had a story about doing work and not receiving payment as agreed from the client.

Other interesting findings in the report:

  • Top engagements are in TV/video production, writing/journalism, graphic design, animation and finally photography (all have more than 10%). Some small categories with 1% are gaming, event planning and jewellery.
  • There is 50/50 split between those that have formally registered their business and those that haven’t. Of the non-registered ones, some can’t afford to lose some of their income in taxes while others do not see the benefit in registering a business, paying taxes, and accessing the supposed benefits that taxpayers enjoy, such as NHIF and NSSF.
  • 23% work in the sector part-time. Their other sources of income are teaching (7) and 4% each for farming and events equipment rental.

Check it out the full report here.

Also, read more about ADMF, and its sister institution, the Africa Digital Media Institute (ADMI). Some of the courses open for enrollment in 2021 including certificates in video game development, music production, video production, digital marketing, and Rubika 2D animation as well as diplomas in Rubika video game design, sound engineering, animation & motion graphics and film & television production.