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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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Africa

Feds: Nigerian scammer arrested in $50M scheme that targeted Chicago companies

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A man from Nigeria has been arrested after being accused of running a $50 million scheme that targeted Chicago companies.

Olalekan Jacob Ponle allegedly got an unnamed Chicago-based company to wire transfer more than $15 million. Another local company lost $2.3 million, but investigators believe the scheme is worth more than $50 million.

Sources pointed WGN Investigates to his Instagram feed which looks like a lifestyle of the rich and famous.

Here’s how prosecutors said the alleged scheme worked.

Either he or his co-conspirators were able to gain access to company’s email accounts through a phishing attack.

In one of the Chicago cases, they allegedly sent an email that appeared to be from the company’s Chief Accounting Officer to another employee ordering the a transfer.

The criminal complaint says “The fraudulent email was almost identical to a prior, legitimate email” right down to the name on the bank account. But the account “number” was different.

Federal agents said Ponle’s scheme spanned at least 9 months last year.

During that time, one of his Instagram posts read: “Money don’t make a man, a man makes money.”

Ponle is a Nigerian national and was taken into custody in the United Arab Emirates. UAE expelled him and federal agents brought Ponle to Chicago Thursday night for an initial court appearance Friday morning.

A detention hearing is schedule for late next week.

By WGN

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Business

Full list of journalists fired from NTV Kenya

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News emerging from Nation Centre indicates that some of the country’s top journalistic talents have been fired.

A list exclusively seen by Pulselive.co.ke showed eight renowned reporters and anchors whose terminations took effect on Friday July 3, 2020.

Among those fired are Brenda Wanga (news reporter), anchor Debarl Inea, Sharon Baranga (reporter) and Shaban Ulaya (sports reporter)who have been with the media house for years

Others on the list are Harith Salim (swahili anchor), Lillian Kiarie (business reporter), Silas Apollo (news reporter) and Ken Mijungu who had confirmed his departure from NTV earlier in the day.

Journalists (from L to R) Harith Salim, Lillian Kiarie, Silas Apollo and Shaban Ulaya who have been fired from NTV
Journalists (from L to R) Harith Salim, Lillian Kiarie, Silas Apollo and Shaban Ulaya who have been fired from NTV

NMG CEO’s message

A memo by the Nation Media Group’s CEO Stephen Gitagama earlier in the week had outlined that the media company is keen to retain only those with the relevant skills and expertise.

“The Group seeks to radically change its business model from print advertising and physical reader copy to digital advertising, ePaper subscription and content-driven reader revenue with the objective of establishing leadership in the mobile publishing landscape in Africa while exploring other new revenue streams in the experiential and technology space.

“This will require retooling and resourcing the Group with relevant skill sets critical for success in the new business environment. Regrettably this will result in reduction of our workforce effective Friday July 3, 2020,” the memo read in part.

NMG is planning to shift to subscription based journalism after projecting that the traditional advertising business model has run its course using The New York Times as a benchmark.

“This new reality necessitates the reengineering of Nation Media Group to accelerate its digital transformation,” the company’s CEO Stephen Gitagama said in a circular to staff on 1st July 2020.

The company which runs operations across East Africa is looking to send home 100 employees across its markets to achieve its short term objectives.

Media observers opine that the latest purge will lead to reduced journalism quality even as the company tries to style itself as the best ahead of baying competition.

Big names

The employees axed on Friday join another 40 who received termination letters on Thursday. The list includes;

Francis Munywoki Nation Newspaper Division Managing Director.

David Aduda- partnerships & projects manager and long-serving education editor,

Ng’ang’a Mbugua- Business Daily Managing Editor.

Francis Wanyonyi Wambilianga- Daily Nation News Editor.

Mark Agutu- Editions Editor

Jeremiah Kiplagat- Eldoret Bureau Chief

David Aduda- Editor

George Omondi, Business Daily- Section Editor

Julius Sigei- Agriculture Editor

Joe Mbuthia- Output Editor

Alex Shikami- Senior Internal Auditor

Martin Mwangi- Deputy Sub Editor

Henry Gekonde- Revise Editor

Nancy Ogutu- National Digital

Peter Choge- Nation Digital

Momanyi Maosa- Nation Digital

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VIDEO: Turmoil, panic at Nation Media Group as hundreds receive termination letters

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Mass lay-offs at Nation Media Group began Thursday in earnest with preliminary reports indicating deep cuts touching on a number of senior editors and managers.

Reports  paint a ruthless restructuring that will leave Nation Centre numb for some time.

Long-serving and one of the most recognizable NTV news anchors, Ken Mijungu was among the first people in the Broadcasting Division to be shown the door.

Today, the process started with the newspaper section, where 40 journalists are targeted, and management before it moves to NTV tomorrow. The big casualties so far  include Nation Newspaper Division Managing Director Francis Munywoki, partnerships & projects manager and long-serving education editor David Aduda, Business Daily Managing Editor Ng’ang’a Mbugua and Daily Nation News Editor Francis Wanyonyi Wambilianga.

Twin Tower bloodbath

Also picked on the first day of staff reorganization are editions editor Mark Agutu, agriculture editor Julius Sigei, Gabriel Chege of IT, Veronica Chirchir (HR), output editor Joe Mbuthia, Martin Mwangi (Deputy Chief Sub Editor) and Revise Editor Henry Gekonde. Nancy Ogutu, Peter Choge and Momanyi Maosa from the online department/ Nation Digital have also been shown the door.

David Aduda, who previously worked as editorial manager, is among editors who have negotiated an exit package through which they will be contracted to offer critical editorial services under NMG’s new outsourcing model.

Others are George Omondi (Business Daily, Section Editor) and Eldoret regional editor (bureau chief) Jeremiah Kiplagat. Ng’ang’a Mbugua was among editors who got promoted in January 2019, moving from Daily Nation to Managing Editor of Business Daily. Joe Mbuthia had been hoisted Production Editor/Head of Production to output editor.

Peter Choge together with Momanyi Maosa are said to have been on contracts as online sub-editors which expired and have not been renewed.

In Finance, Alex Shikami, a Senior Internal Auditor, has been kicked out. Munywoki joined NMG in November 2017 from Standard Group and had been hoped to reengineer the newspaper section to make it more profitable. Instead, the newspaper division, NMG’s flagship and cashcow, has been losing business by the week, cutting revenues and profitability.

The 40 editorial staff will continue receiving their letters up to next week. It is understood that some of people affected, especially younger ones, will be recalled starting August to work on contracts, according to discussions in yesterday’s zoom meeting. The Group is targeting to lay off over 100.

Curiously, most affected employees are male, online with NMG Group Editorial Director Mutuma Mathiu’s promise, last year, to “protect ladies” as much as he could, someone familiar with this assertion told BT.

Interesting changes are on the newsdesk. Inside Nation Centre rumors last year were that the newsdesk was dominated by Luhya editors. It’s not clear whether this happened by design or coincidence. A plan, it seems, was crafted to correct that anomaly and enhance ethnic balance on the desk. The desk has so far lost Bernard Namunane, Peter Leftie (who has since returned to The People), Lucas Barasa (now with Mandera County Government), and now Wanyonyi Wambilianga, all from the Luhya ethnic extraction. Wambilianga is said to have fallen out with Daily Nation Managing Editor Pamela Sittoni.

Now Harrison Misiko remains the only editor from the Luhyia community on the desk, although he is an assistant news editor. With Wambilianga’s exit the newsdesk has been left with only Misiko, after Dave Opiyo landed a job as Director Communications at Kenyatta National Hospital (KNH) in April this year.

The NMG editorial leadership was forced to recall Misiko who was working from home, early today, to come and man the desk, after Wambilianga was laid off.

The management says it is re-engineering the Nation Media Group to accelerate its digital transformation. In this new model, it will utilize technology more and cut down on human resource.

Those affected will receive counselling support, while those stationed outside Nairobi will be offered relocation assistance. Also, the laid-off staff will receive medical cover for a period of two months until August 31, 2020, in a rare show of magnanimity.

Thereafter, the company has negotiated a medical insurance scheme through its current provider which those affected may opt to individually join.

The layoff comes at a very tricky time when most media houses are offloading employees to survive the Covid-19 pandemic disruption. Already Mediamax has sent home nearly 100, while Royal Media Services is restructuring in a low-profile style. Standard Group is waiting for the whistle.

Small is beautiful

Suddenly, small is beautiful for a big media house with operations across East Africa.

NMG, hoping to ride the tech wave made more popular by stay-at-home protocols for stemming the spread of Covid-19, is betting big on mobile delivery of its journalism products and advertising. “This new reality necessitates the reengineering of Nation Media Group to accelerate its digital transformation,” the company’s CEO Stephen Gitagama said in a circular to staff on 1st July 2020.

“In this journey, the group seeks to be innovative, agile and adaptive with the objective to take up leadership in the mobile publishing landscape in Africa while passionately living our mission to positively transform society, by creating new value and generating quality, differentiated and engaging content to consumers, however, wherever and whenever they need it.”

The company will be concentrating its investment and human resources on new areas critical for growth. Inevitably, this will result in merging and scrapping of some sections which will in turn lead to a reduction of its workforce. “This is an extremely difficult decision in view of the prevailing circumstances,” he said.

Insiders say the company is targeting to offload more than 100 employees across its operations in East Africa, though Kenya will bear the biggest shave. Mr Gitagama says the exercise will be carried out with utmost due respect to our employees and within the Kenyan laws. “We will strive to provide all the necessary support to help them manage the transition,” he said.

Moving to Mombasa Road

Nation Media Group operates print, broadcast and digital media outlets in Kenya, Uganda, Rwanda and Tanzania, with operations in print, broadcast and digital media.

The Coronavirus (COVID-19) pandemic has destabilized most businesses globally, including in Kenya. Many companies have either shutdown or substantially scaled down operations due to the drastic decline in revenues. The media industry in the country has severely been impacted.

NMG will be permanently adopting a work-at-home model implemented in March to ensure social distancing at the workplace, where a section of its workers have been working away from the office permanently.

Having some workers sacked and others working from home will reduce pressure on office space, allowing it to cut down on rent at the iconic Nation Centre, owned by its sister company Property Development Management (PDM). The board and management are considering moving the NMG offices from the city centre to its Mombasa Road printing press premises.

While a financially prudent move, working from home and away from the city centre comes with its share of challenges. Standard Group tried the out-of-town model but was forced to relocate back to the CBD after experiencing delays in getting to story subjects and press conferences. Working at home might spring coordination issues especially for reporters who are required to be ever mobile.

NMG is planning to shift to subscription based journalism after projecting that the traditional advertising business model has run its course using The New York Times as a benchmark.

“This new reality necessitates the reengineering of Nation Media Group to accelerate its digital transformation,” the company’s CEO Stephen Gitagama said in a circular to staff on 1st July 2020.

The company which runs operations across East Africa is looking to send home 100 employees across its markets to achieve its short term objectives.

Media observers opine that the latest purge will lead to reduced journalism quality even as the company tries to style itself as the best ahead of baying competition.

Big names

The employees axed on Friday join another 40 who received termination letters on Thursday. The list includes;

Francis Munywoki Nation Newspaper Division Managing Director.

David Aduda- partnerships & projects manager and long-serving education editor,

Ng’ang’a Mbugua- Business Daily Managing Editor.

Francis Wanyonyi Wambilianga- Daily Nation News Editor.

Mark Agutu- Editions Editor

Jeremiah Kiplagat- Eldoret Bureau Chief

David Aduda- Editor

George Omondi, Business Daily- Section Editor

Julius Sigei- Agriculture Editor

Joe Mbuthia- Output Editor

Alex Shikami- Senior Internal Auditor

Martin Mwangi- Deputy Sub Editor

Henry Gekonde- Revise Editor

Nancy Ogutu- National Digital

Peter Choge- Nation Digital

Momanyi Maosa- Nation Digital

 

The media industry is keenly watching how the virtual office model will be implemented by NMG and which, indeed, it will cut cost and enhance its mobile transformation.

FULL CIRCULAR

Nation Media Group

Media of Africa for Africa

To All Staff-NMG Kenya 1st July, 2020

RE: REORGANISATION

Dear Colleagues,

I trust you are keeping well and staying safe while observing the Ministry of

Health protocols on prevention of COVID-19 pandemic.

In my last communication, | stated how the COVID-I9 pandemic has resulted in global uncertainty and unprecedented challenges impacting most businesses adversely. As you are aware, many companies have either shutdown, substantially scaled down operations or re-engineered themselves due to the drastic decline in revenues. Globally, the media sector has not been spared by the pandemic and media houses including NMG, having been severely impacted.

During this period, management has undertaken several cost-saving interventions to enable business continuity, ensure sustenance of livelihoods of staff and their dependents and continue delivery of services to our customers. However, despite taking these key actions, the business has continued bearing the brunt of the pandemic.

In view of the current adverse impact on business performance, the temporary salary reduction will be extended to 31 December 2020. This unavoidable action will be reviewed depending on the company’s performance and as the COVID-19 situation evolves. Individual letters will be sent to the affected employees.

Further, this new reality necessitates the re-engineering of NMG to accelerate the Group’s digital transformation. In this journey, the Group seeks to radically change its business model from print advertising and physical reader copy to digital advertising, ePaper subscription and content-driven reader revenue with the objective of establishing leadership in the mobile publishing landscape in Africa while exploring other new revenue streams in the experiential and technology space.

This will require re-tooling and resourcing the Group with relevant skill sets critical for success in the new business environment. Regrettably, this will result in a reduction of our workforce effective Friday, July 3, 2020.

It is an extremely difficult decision in view of the prevailing circumstances and we understand the impact this will have on those affected and their families. The exercise will be carried out with utmost respect to our affected colleagues and in adherence to the Kenyan labour laws. We will strive to provide the necessary support to help exiting staff manage this difficult transition.

We have made special arrangements for those affected to receive counselling support. Colleagues stationed outside of Nairobi who are affected will be offered relocation assistance. The affected staff will receive medical cover for a period of two months until August 31, 2020. Thereafter, the company has negotiated a medical insurance scheme through its current provider which those affected may opt to individually join.

Should you have any questions, please do not hesitate to speak with your line manager or contact Human Resources Department.

Stephen Gitagama

GROUP CHIEF EXECUTIVE OFFICER,

Nation Media Group

 

-Businesstoday.co.ke

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