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Bad time to be a landlord in Kenya

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Earlier this year, tenants of an apartment block in Ruaka, Kiambu County, were pleasantly surprised when their landlord slashed their monthly rent by Sh5,000.

Property manager Bekam Properties Ltd gave its clients residing in the deluxe apartments a reprieve by lowering the payment for their two-bedroom houses from Sh35,000 to Sh30,000, effective February 1.

Their notice read, “ … in consideration of the prevailing economic situation in Kenya, the landlord has decided to lower your monthly rent from Sh35,000 to Sh30,000 with effect from February 1, 2020.”

Elsewhere, it was an early Christmas for some traders in Dagoretti late last year when their landlord reduced their monthly rent, citing tough times.

The property’s manager, identified as Simon Ngugi, asked occupants of Muhu Building on Naivasha Road in Dagoreti North to pay Sh2,000 less in rent for their stalls beginning November 1, 2019.

The tenants had hitherto been paying Sh10,000 per month for each unit.
The decision, the manager said, was made in an effort to retain current tenants and attract new ones due to “serious business fall”.

The move was a rare gesture given that the majority of Kenyan property owners only revise rent upwards on the flimsiest of reasons, including a fresh coat of paint.

These are just a few of the numerous instances in which landlords and developers cut their charges in the past few months.

Some proprietors are providing discounts such as a free months, longer fit-out periods and other inducements to retain their tenants and attract new ones.

But while these revisions may appear an act of kindness to help struggling tenants meet their targets and basic needs owing to tough economic times, a deeper look portends a property sector in turbulence due to the economic slowdown alongside sector-specific challenges that have seen the returns drop significantly.

Industry players are unwittingly staring at the likelihood of empty premises, devoid of customers, as the tough economic times persist and the property sector gets saturated with options.

They have resorted to using inducements as the only possible means to ensure they retain their tenants as high rents would only result in customers choosing more affordable options available in the already bursting market.

The House Price Index released earlier this year by property consultancy firm HassConsult Ltd showed home prices in satellite towns declined by 50 basis points last year.

This is the first-ever drop since the survey was launched in 2008.

The decline was attributed to the challenging economic environment witnessed during the period characterised by massive job losses and company shutdowns.

Landlords are becoming less demanding, especially in areas where there is an oversupply of similar units, according to HassConsult’s head of development consulting Sakina Hassanali.

Cytonn analysts and Knight Frank Kenya’s first-half market update released in September both attributed the gloomy performance in the commercial sector to an oversupply of retail space.

The increased development of malls did not make matters easier as it heightened competition, especially for the low-end markets.

A market update by Knight Frank Kenya showed that prime residential prices fell by 1.8 percent over the same period, increasing the decline to 6.7 percent in the period to June last year.

The report held that these factors transformed the market in favour of buyers and tenants, a perception that was then heightened by multinationals continuing to downsize their investment while there were fewer expatriates relocating to the country.

This combination of dynamics hurt the niche market.

Wacu Mbugua, a market analyst at Cytonn, notes that oversupply of retail space mostly hit the Nairobi metropolitan area, exhibited by the cropping up of malls and low occupancy rates, and in turn lower rental yields.

“The outlook for the sector is neutral and we are likely to witness reduced development activity in Nairobi, with developers shifting to county headquarters in some markets such as Kiambu and Mt Kenya regions,” she says.

The shift to the outskirts such as Kiambu is believed to have caused the prices of property and rent to rise earlier in 2019.

However, in the last quarter of the year, property management companies began sending notices to their clients indicating an intention to slash rent.

Ms Hassanali says developers looking to make a killing in the lucrative real estate market are now revising property and house prices if they are to make any headway.

The House Price Index goes further to show that rent in satellite towns dropped by 2.1 percent last year, an indication that landlords reduced their demands in response to the tough economic times and increased market supply.

As a result of the value adjustment, Juja recorded the highest drop of 9.6 percent over the year, while in Nairobi suburbs, it also took a downward turn, dropping 2.3 percent in the same period.

“Contrary to what is universally believed, the rent rates in high-end areas such as Lavington, Kileleshwa, Westlands and Loresho actually dropped in 2019,” the real estate consultant details, noting that Parklands recorded the largest drop in rental prices of 5.2 percent over the year.

Nonetheless, Kenya’s capital is understood to be witnessing a resurgence of demand from global investors eyeing bargains in select high-end properties.

The country remains the favourite investment spot for foreign direct investments and the reduced property prices blamed on price corrections give buyers a reason to smile, according to the HassConsult Ltd property adviser.

However not all property owners read from this script, as some maintained their initial rent charges despite cries from some tenants.

Mr Mundhir Abdirahim, a resident in Eastleigh, decries the rising rates of rent in the area despite the economic state of the country.

“Things are different in Eastleigh. Even when the economy is crumpling, landlords will keep asking for more,” he said.

by nation.co.ke


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Top athlete turns to jiko-making to beat pandemic

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They say a man must do what a man must do.

This idiom has become a reality to Dominic Samson Ndigiti, the reigning Africa U20 10,000 metres walk race champion and former World U17 10,000 metres walk race bronze medalist during the Covid-19 times.

Ndigiti, who has won Kenya a gold medal at the Africa Under-20 Championships held in Abidjan, Ivory Coast, has been crisscrossing the country, doing what he now loves to do most: Making affordable, energy-saving jikos – charcoal cooking stoves.

Coronavirus pandemic

Though the walking race champion learnt the skills of making this particular kind of jiko in 2018 when in Finland where he had gone for a competition, he did not put them to use until when coronavirus hit the world, putting a break on most sporting activities.

“I saw the whites making the jikos in 2018 when we had gone to Finland for Under20 competitions. It took a week for me to learn. But I started being serious when coronavirus hit us. The jikos now earn me a living,” he said.

The 20-year-old says the modern jikos use charcoal or firewood.

“It uses less firewood and it has a chimney, which helps keep smoke out of the house. It is not a complicated jiko and long after cooking is done, it conserves heat because of the clay bricks used,” he said.

The jikos are of different sizes and can fit in any kind of house be it permanent, temporary or semi-permanent.

“I do not discriminate for which house to make my jikos. Charges vary according to sizes. A one-stoned jiko goes for Sh3,000, two 4,500, three 6,000 and four and above goes for Sh10,000,” said Ndigiti.

He says that materials needed include cement, clay bricks, fireproof and red-oxide paint.

Different work

Ndigiti says many people see him as a successful person owing to his record in the walking race, but the tough times have forced him to work differently.

“I am grateful because Kenyans have responded very well to my venture. I have visited many counties in the past few months, making jikos. Before coronavirus, I did not know my home county of Kisii well, though I have was born and brought up here, but making jikos has made me a tourist,” he said.

Ndigiti, who hails from Marani sub-county in Kisii County, schooled at Kiandega High School in Nyamira county and developed a passion for the walking race while in Standard Six.

He says he was inspired by his teachers.

“I am glad for the achievement I have made in walking race. That is another gift in addition to walking that God has given me. Many people in Kenya do not know this kind of sporting activity. China, Spain and Japan top the competitions,” he said.

The IAAF World U18 Championships is an international event bringing together athletes from all over the world who are 17 or younger.

“Coronavirus brought a lot of problems in the world and we couldn’t go out to compete. I hope this will end soon. But this pandemic has made me learn the hard way. Talents are to be exploited, no matter how much little income they bring,” said Ndigiti.

He is hopeful that after the pandemic, he will represent Kenya in the Olympics and will bring home a gold medal.

Ndigiti comes from a humble family and his success in the walking race has not taken away his humility.

Ruth Mbula | Nation Media Group

“We live life easy. Living well with people has taught me a lot during this coronavirus time. The requests to make more jikos is overwhelming,” he said, adding that Elgeyo Marakwet Woman Rep Jane Kiptoo has already asked for his help in making more than 100 jikos for women groups.

He says most of his clients are women. “They have embraced my idea of making our kitchens look better.”


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Navigating through the Covid-19 Terrain and a Story of Exceptional Transformation at Optiven

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Navigating through the Covid-19 Terrain and a Story of Exceptional Transformation at Optiven

Optiven Group has continuously had all its eyes trained on its vision of economically and socially empowering and transforming the society.

This vision was however momentarily shaken by Covid-19, especially on the month of March 2020, when the first case was reported. Soon, all was not business as usual. The pandemic scared our staff and customers alike. With huge loans to pay, massive salary bills and many office rentals to cope with, everything seemed daunting. The worst was when we closed our offices and temporarily sent hundreds of staff home. That was extremely agonizing to bear.

As an entrepreneur, this was one of my worst periods ever. The headaches were not ceding ground and the only thing that was consoling was the power of prayers. It is during such times when the test of leadership comes to play.

Our most affected area of business was our sister venture entities in the name of restaurants. Indeed, we sent hundreds of staff home. We are now however thanking God that 85% of these staff are back and with a projection of bringing back the rest soon, as business starts coming back.

Importantly, soon after Covid-19 pandemic hit, Optiven Group was swift in adopting new strategies and quickly embracing appropriate technology to counter the new terrain. This is perhaps one of the reasons why the firm is still expanding, especially on the area of job creation and mentorship front.

It is largely courtesy of these strategies that despite the current pandemic, we have managed to launch enormous mentorship programs such as the George Wachiuri School of Mentorship and also engaged in encouraging SMEs that have really been struggling to stay afloat through our business mentorship sessions. Through the latter, we have continued to inspire over 7,000 active participants through George Wachiuri’s Facebook LIVE shows that are also available on my You Tube channel, this has continued to give hope to many.

Still, during this period, we have managed to create over 100 permanent jobs for both senior and middle level employees, plus over 200 casuals that daily work in our projects. This job increase is in line with our goal of creating over 30, 000 jobs by the year 2030.

On the real estate front, we really had to think away from the box and undertake a massive 360 degree transformation that was educated by thinking differently and changing how we used to do things before Covid-19.

Thanks to this, we have continued to provide our customers with even more offerings in terms of value additions to our projects. It is during this period of Covid-19 when we decided to put our efforts towards GoingGreen in most of our projects. Matter of fact, we have surprised our customers by further transforming our projects through installation of green energy, massive tree planting, and installation of water recycling systems, encouraging plot owners engage in farming of organic foods and subsequently feed their families from their previously idle plots. Significantly, we also changed from use of Kenya Power electricity in our projects to the use of solar energy on almost all amenities and by so doing, we have now managed to save millions of shillings in terms of KPLC bills. Most importantly, we are glad that we are now fully plugged on the green energy agenda.

All along, the company has continued to flourish through innovation, partnerships, massive philanthropy activities and even more importantly, a commitment to always entrust all our undertakings to God.

We are glad that we are consistently realizing our vision of being pacesetters in social economic transformation through opportunities such as job creation that have a positive multiplier effect on the society.

Guided by the same vision, we always dedicate 5% of what we make in business and channel it to the less fortunate through a registered foundation viz Optiven Foundation. We have hundreds of orphans whom we support to go through school. We also support the physically challenged to get free wheelchairs and support girls to access schools. The Foundation also cares for over 300 families and helps them to get food daily.

Indeed, we at Optiven exist to economically and socially empower and transform the society.

#ChangingLives
#EyesOnTheCommunity
#CreatingJobs
#GoingGreen
#HousingKenyans

Contact Optiven Group:0790 300 300
Email: admin@optiven.co.ke Website: www.optiven.co.ke George Wachiuri Blog: www.georgewachiuri.com
YouTube: https://bit.ly/2VdSuFJ


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How I made my first million

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At what age did you make your first million? 

I was 19.

How did you make it? 

I was running a creative design and printing agency. I bid for and won an order to design and print marketing materials for a global NGO which has offices in Kenya.

How did you spend or invest it? 

I re-invested most of it into the business by buying more machinery to reduce costs associated with outsourcing. I also set up a new business with a friend – a movie shop in Nairobi CBD.

The biggest money mistake you have ever made? 

Setting up the movie shop was the greatest money mistake – but I picked up two of the greatest business lessons. One, to never divest too early, and only invest in a business you understand well.

What is the best investment you have ever made?

 I would say investing in myself and in my exposure through travel. Travel has made me see endless possibilities for innovating new products, business models and solutions in the African market. A combination of the international exposure and strong local market understanding is priceless.

What is the worst purchase you have ever made? 

The movie shop. I bought a ready business that I did not understand and it went crumbling down. We eventually closed it a few months later.

If you had a spare million or two, where would you invest it right now?

I would invest it in my current business – a software technology company. This is because I believe the business has potential to become a great success.

What is the biggest money lesson you have learnt about growing it and making it work for you? 

Initially, we all have to work for money. However, I have learnt that the wealthy person has learnt how to make money work for them, through consistently investing what one earns.

Where do you learn about finances? 

I read a lot of books about real success stories from entrepreneurs because I believe entrepreneurship is a great way to create wealth, while creating value in the society. I also stay curious to learn about different investment vehicles because I know I shouldn’t put all my eggs in one basket.

Any financial myths you think should be busted? 

Money is not the root of all evil; greed may be. Money is a good thing because it can create freedom and prosperity, if well spent.

What two personal finance rules do you follow? 

Live within your means; and work to make money as a tool to accomplish real goals. Real goals are not just about making “enough” money, because it is almost impossible to define “enough.”

Investing or saving…Which one carries more weight?

Investing. However, they go hand to hand as saving to invest is acceptable.

One can get rich easily… but how does one stay rich? 

By constantly making calculated investment risks, and always striving to be wealthy, not rich.


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