Buildings demolition put real estate investors on edge

Realtor Hass Consult has cautioned against what it terms as the State’s disregard of genuine land ownership documents and regulatory approvals while demolishing multi-million shilling buildings, saying it is hurting the property market.

Head of Development Consulting and Research Sakina Hassanali said real estate investors were fearful of the trend where State-sponsored demolitions appeared to target documented properties.

“While Kenyans support demolition of properties irregularly acquired and approved, the government is 50 per cent of that problem as all allocations and approvals were confirmed by State agencies,” she said.

The firm’s quarter three Land Price Index report showed property prices had experienced a paltry 0.2 per cent growth as buyers were unsure of the authenticity of land ownership papers and regulatory permits presented during sale of any property.

“The risk position for property ownership papers issued by government has risen tremendously as the same government does not recognise its own papers. This has hurt present and future property deals as investors are unsure of what will happen anytime soon,” she said.

Westgate, Airgate and Southern Mall buildings in Nairobi are among buildings that have been demolished, with more targeted for destruction for encroaching on riparian and road reserves as well as on social amenity plots.

In the meanwhile, Ridgeways experienced the highest quarterly land price increase at 2.9 per cent while the upmarket Kitisuru area enjoyed the highest annual land price rise at 9.4 per cent.

Juja reported the highest annual price rise at 19.4 per cent to stand at Sh13 million followed by Mlolongo’s four per cent where an acre goes for Sh25.3 million.

The looming development of 500,000 houses has also seen prospective house-owners develop a wait-and-see attitude.

The report noted that ongoing road and Standard Gauge Railway (SGR) substation developments within Ngong area has excited the land sales market to record a 17.8 per cent annual price increase.

New investments in Grade A offices, high-end residential and hospitality properties in Nairobi continued to make Upperhill area the most expensive place to own land at Sh558.3 million for an acre followed by Parklands (Sh417 million) and Westlands (Sh411 million).

Rents for apartments in Ngong registered the highest annual rise at 13.9 per cent followed by 6.7 per cent for Mlolongo, Athi River 5.9 per cent and Kiambu at 5.8 per cent.