THE PROPERTY SCENE - NAIROBI SPECIFIC MARKET BRIEF JULY 2012 BY BRAMPTONS REAL ESTATE FOR LUCAS CHACHA

UNDERSTANDING THE REAL ESTATE MARKET. Real estate is a very practical and cash intensive business in every aspect of it be it letting, development, sales management or even consultancy. The market in Kenya is segmented from the low cost to the real upmarket. The market segments vary by location, type & quality of property, property prices and their various operational dynamics.

To understand the market, we take you through a three pronged approach thus Awareness Education Action.

Awareness: This is where you determine how much youre willing and are able to access and spend in the market. This budget will dictate the segment and areas that you will participate in within the market.

We then advise and let you know what is likely to be available for you. In addition you will be taken round to view at least three properties from which you will then have an idea of what your money is worth in the real estate market which will further help you strategize going forward.

Education: We give you access to information that will demystify the market complexities and this will be dedicated to the market segment you are able to access at the time. The various areas covered are: Location what areas within the city fall within your segment Types of properties available. The ownership structure / Property tenure. Property prices both for let & for sale. Financing brief. Sample properties Bonus material

Action: This step can only be taken by you after understanding your priorities and goals. Thus: Getting your finances in order & if necessary applying for a mortgage / loan. Selecting your preferred property for acquisition. Buying the property. Managing your investment.

LOCATION.

Types of Properties: The kind properties in the lower mid market are predominantly low cost housing including: Multiple Residential units i.e. Apartments / flats predominantly 1, 2 & 3 beds. Maissonattes detached or semi detached typically 2, 3 & 4 beds. Sectional land land available as fractional pieces to the acre - predominantly 1/8, 1/6, , etc There are some areas within the entire market where land cannot be subdivided below 5 acres, 2 acres, 1 acre, 0.5 acres, and so on, also in the same breath there are areas you cannot develop commercial properties, high rise residentials and so on the reason for this is because each inch of the entire market is subject to physical planning regulations and a bundle of other operational regulations.

Your easiest access point to the real estate market would be the lower mid market segment which as always is characterized by more renters than buyers of property. Essentially this means that the segment is very attractive for cash flow investments derived from the regular rental income. This becomes further appealing as you increase the number of units you own thereby pushing up your leverage ratio while simultaneously you benefit also from capital gains via increased value of your total assets over time.

The lower mid market areas in Nairobi that are within your reach are: 1. Along Mombasa road imara daima estate, athi river, ruai, syokimau / mlolongo, embakasi along airport north road. 2. Langata Road langata estate 3. Magadi road rongai estate 4. Thika road Parts of pangani Estate, mathare area, Ngumba estate, Roysambu, Zimmerman, kahawa west, kasarani, Mwiki, Kahawa wendani, Juja ,Ruiru, Githurai. 5. Limuru road ruaka area 6. Naivasha road Area past Dagoretti corner.

Selecting houses have therefore to be done by a keen eye to get the very best of this segment as the prices between the cheapest and most expensive houses do not vary by a huge margin. In addition, when selecting a house one has to pay attention to the quality, the neighborhood and the convenience the property provides to the-would be occupant & because this is for investment purposes then of all these factors the most critical is the price.

The relationship between the price (P) and the return (ROI) has to make sense to the investor.

Ownership / Tenure:

For any new property you are purchasing the most vital issues to check are: Availability of fresh water municipal water, borehole water and extra storage tanks for each house. Security the security status o the neighbor hood -

The Kenyan land laws allows ownership of property in various ways through a myriad of legislation i.e. Land Titles Act, Government Lands Act, Registered Titles Act and so on. More generally property in Kenya is either held as freehold or leasehold. The new constitution of Kenya and the ongoing land reforms will ensure majority of property ownership is leasehold with the term of the lease having a maximum period of 99 years renewable at the lapse of the term. The title structure: Since you are likely to get a property in a gated community this will be the likely title structure. There is a main title for the entire piece of land upon which the development is done.

watchmen and electric fencing.

Types of properties and prices:

TYPE MAISSONATTE APARTMENT

SIZE 1 - 2 BED 2 - 3 BED 1 - 2 BED 2 - 3 BED

PRICE RANGE 3 - 4M 4 - 8M 3 - 5M 5 - 8M

RENTAL RATES SIZE RANGE - langata rd / msa rd 1 bed 15 - 18k 2 bed 25 - 35k 3 bed 30 - 40k

RANGE - Thika rd 10 - 15k 16 -25k 25 - 30k

Each unit will receive a lease for their house with a share in the management company.

The management company will receive monthly payments from all owners of units to act as the service charge and to be used to manage the common areas i.e. compound cleaning, gardening, lighting, security and garbage.

AMARA PARK imara daima msa rd 1BD 4.5m, 2BD 5.5m

Greatwall apartments BEIJING RD OFF MSA RD 2BD 4.0M

Amara Park is a premium lifestyle address offering value for money. The superbly designed apartments are located next to Imara Diama; off Mombasa road, adjacent to General Motors and is 10 kilometres from the CBD.

GREATWALL APARTMENTS is a comprehensive fully serviced development comprising 528 apartments each 2 bedroomed. THE PROPERTY IS LOCATED along Mombasa road near Mlolongo Township along Beijing road.

There is easy access to the City Center, Industrial Area, the Jomo Kenyatta International Airport and the ICT Sameer Center. The choice of the architecture concept is suited to the environment with additional value through keen attention to design concepts, floor plans and superior finishes. Ample parking spaces are also provided.

When visiting the property from Nairobi just after the gate to Directorate of civil Aviation take the road on left side of main highway and pass the gate of All-pack Industries to join Beijing Road. It is approximately 18 km from Nairobi town center and 9 km from JKIA. The property is securely stone perimeter walled, one gate and security guard house. The access road namely Beijing road is cabro surfaced to the newly constructed Mombasa highway. WATER is supplied from bore hole as well as from EPZ Athi-river to ensure there is plenty of clean water supplies throughout.

The five blocks with 20 apartments each are amidst a playground surrounded by well manicured lawns and landscaped gardens. A borehole will enhance the availability of water.

The structural work is by well known contractor namely China Wu Yi construction who in teamwork with the developer, project management team and other technical consultants insist on highest technical skills and materials for the entire project. EACH APARTMENT is finished with colored ceramic tiles on floor, all wet areas and full wall in the kitchen. The kitchen is fitted with inbuilt MDF cabinets and solid work-tops. Both bedrooms have inbuilt MDF wardrobes. The kitchen has an adjacent laundry area .All rooms are well lit with large windows for adequate ventilation. The COMMERCIAL center comprise of shops, restaurant and kindergarten. FIVE STAR GARDENS 2 BD, 5M - 3BD, 6M

In addition, each unit is situated in one of the 5 courts created for enhanced privacy and security. Five Star Gardens will add a new sparkle to your life and change the way you live forever. 2bd 5m 3bd 6m Tamarind Valley - Embakasi Nairobi

Tamarind Valley at Embakasi offers eight different choices, because no two families are the same. Our entry level unit is a two bedroom low-rise apartment that has a lounge, dining room and kitchen which also has a laundry yard. We also offer the same style of apartment, but with three bedrooms for that extra space. There is a two bedroom bungalow with a lounge/dining room and kitchen, all set in its own compound. It comes with in two different options; semi-detached and detached.

A community of 313 elegant two and three bedroom apartments set in a secure gated community with lots of gardens and playgrounds. Every apartment is spacious, bright, stylish and, complete with modern finishes. Moving on, we are offering a three bedroom bungalow with a lounge/ dining room and kitchen in its own compound. Like the two bedroom bungalow this also comes as either a detached or semi-detached house. We then have a three bedroom detached bungalow with

master en-suite, lounge/ diner and kitchen. This house enjoys a larger compound. It also has the option for a Domestic Staff Quarters. Finally, we then have a three bedroom maisonette offering more spacious accommodation, but at an affordable price. It also has an option for a Domestic Staff Quarters. At Tamarind Valley we have a home to suit every family. Tamarind Valley at Embakasi... a place to call home - Close to a modern shopping mall - External wall - Borehole - Waste water recycling - Individual courts with green areas - Street lighting - Cabro roads - Landscaping including generous use of trees and shrubs

Imara Gardens msa rd 2bd + sq 6.4m, 3bd +sq 7.4m

Imara Gardens Housing project is situated on outskirts of Nairobi Mombasa High way; 7 KM from Nairobi city Centre and 3 km from the Jomo Kenyatta International Air port and 5km to Southern bypass. Its proximity to the main Nairobi Mombasa High way and City Centre, Jomo Kenyatta International Airport and the first growing Athi River and Kitengela town makes

2 Bedroom apartment 3.9M 3 Bedroom apartment 5.7M 2 Bedroom semi detached bungalow 4.8M 2 Bedroom detached bungalow 5M 3 Bedroom semi detached bungalow 6M 3 Bedroom detached bungalow 6.25M 3 Bed master en-suite detached bungalow 7M 3 Bedroom Maisonette 7.5M

this development worth while investment. Social recreation and shopping amenities are available from Riara school, Capital Centre Mall (Mombasa Road) Taj mall (Airport road), Nakumatt Embakasi, Mather Hospital, Ole serene Hotel, Panary sky Hotel, Nyayo Stadium, Jomo Kenyatta International Airport and Sameer Business Park.

Features:

Spacious lounge with a balcony Dinning Fitted kitchen A common cloakroom In built wardrobes in all bedrooms More features:-

3 phase power supply by KPLC Paved driveway Drainage and street lighting Spacious children playing ground Gated compound with a shopping centre Price: 2 bedroom and DSQ (97 SQ.M) Kshs. 6.4 M 3 bedroom and DSQ (132 SQ.M) Kshs. 7.4M

FINANCING OPTIONS:

Housing finance generally finance up to 85% the value of the property/ sale price (whichever is lower) for a maximum period of 15 years. Below are details of our mortgage and requirements: Maximum Loan Amount : 85% value of the property or sale price (whichever is lower) Maximum Repayment Period: 15 years Closing Costs: These are costs related to house purchase. They amount to 7-8% value of property i.e. stamp duty (4%), legal fees (2%), HF commitment fees (1%), valuation fees and insurance fees. Deposit Required: 15% of the purchase price plus 8% closing costs Documentation Required (can be sent via e-mail or registered mail): Full copy of passport, Copy of work permit/ residence card, Kenyan PIN certificate Introduction letter from employer stating employment terms 3 months Pay stubs 6 months Bank statements Current utility bills power/ water OR rental lease. Sale agreement/ offer letter for the property. If you have not identified one, log onto www.propertypoint.co.ke Fill in application forms available on our website: www.housing.co.ke

Processing: The whole transaction should take 45 days. An offer letter on approval should be given within 5 working days.

3. Choose the home loan that suits you: Budget with peace-ofmind by choosing a fixed interest rate for the first 5 years. Or you can opt for our variable interest rate from the start of your loan. Competitive interest rates: Our interest rates are designed to make your new home more affordable. What's more, our extended loan periods up to 20 years make your monthly repayments even easier. Get the home you really want: With maximum loan amounts up to Kes 50 million and loans up to a 90% * of the value of your new home, you never have to compromise on your dream home. Who is eligible: All Kenyan Citizens, Permanent Residents or Expatriates are eligible. Maximum age at the end of the mortgage term must be 60 or retirement age, whichever is earlier. Salaried Customers or Directors of reputable companies or well-established SMEs with demonstrable and verifiable monthly income for the past 12 months. Professionals and consultants who earn a regular monthly income and are purchasing a residential property for owner occupation. Facility arrangement fee: 1 % of loan amount (Minimum Kes 10,000) Other Costs you will be expected to meet 1. Legal Costs and Stamp duty varies depending on property value and location 2. Fire (property) insurance Comprehensive insurance with the Banks interest duly noted 4.

Mortgage protection insurance for the borrower to safeguard the borrower during the mortgage term Valuation fees upon approval of application, the property should be valued

Documentation you require: Completed and signed application form. Last 3 Pay slips certified copies. Certified letter from employer stating terms of employment Certified Copy of ID/ Passport Copy of PIN Certificate Sale Agreement Documentary evidence of any other income Certified Copies of bank statements for 12 months (for non-Standard Chartered customers) 3 colour passport size photos (for non-Standard Chartered customers) Copy of Title Deed

*Requirements may be more or vary for Kenyans residing out of the country. Requirements for a Mortgage Transfer Mortgage statement for the last 6 months Completed and signed application form Last 3 Pay slips certified copies Certified letter from employer stating terms of employment (it should include your pay/position/duration of service/retirement age Certified Copy of ID/ Passport Copy of PIN Certificate Documentary evidence of any other income Certified Copies of bank statements for 12 months (for non-Standard Chartered customers) 3 colour passport size photos Copy of Title Deed

Ordinary Home loan - Get 100% financing

S & L - General Mortgage Eligibility: Available to both employed and self-employed persons with a monthly income greater than Kshs. Amount Financed: 90% of the value of the property Interest Rate: 13.5%p.a. Variable, 15%p.a Fixed Maximum Financing Period: 25 years Maximum Loan Amount: Depends on ability to repay Appraisal Fees: 1% of the loan amount Other Fees (third party fees): Stamp duty 4% of the value of the property Insurance approx. 1% of the value of the property Valuation approx. 0.3% of the value of the property Early Settlement Penalty: No Financing to Kenyans in the Diaspora: Yes Benefits

Loan or property value should be between Kes. 3M and 10M You must be a salaried individual with a minimum gross salary of Kes. 100,000 The property has to be a developed residential property The maximum loan repayment period is 20 years With our access mortgage feature, you can make lump sum deposits and withdrawals on your Home loan account at no cost Approval is within 4 days after receipt of all documentation and a dedicated centre to assist you through the home loan process Competitive variable interest rates linked to the banks base rate Embedded credit life protection insurance in the loan repayments Low facility fee

Get 90% financing The loan amount required should be at least 1M Home loans are available to both Salaried individuals and Self Employed Individuals We finance up to 90%of the value of the property value or the sale price, whichever is lower The maximum loan repayment period is 20 years With our access mortgage feature, you can make lump sum deposits and withdrawals on your Home loan account at no cost Approval is within 4 days after receipt of all documentation and a dedicated centre to assist you through the home loan process Competitive variable interest rates linked to the banks base rate Embedded credit life protection insurance in the loan repayments Low facility fee

Flexible repayment terms Joint borrowings Capital appreciation Own occupation Savings on rent Mortgage relief tax benefit Free mortgage advice Friendly customer service

http://www.cfcstanbicbank.co.ke/Kenya/Personal/Borrowing/H ome-Loans/Ordinary-home-loan

Home loan Cooperative Bank Home loan. Terms -Maximum loan as percentage of value (LTV): 80% -Loan term: up to10 years. -Additionally, customer should have lived in the country of residence for at least 1 year at the point of applying for the mortgage. Currently the rates are: 1- 10 years 13.75% Financing up to 90% of the cost of the home you choose to buy, and they will guide you carefully through the whole process. Interest rate: 11.99%. First step requirements; -A regular income -Minimum age of 18 yrs -Valid identification ID or Passport