Cytonn has painted a grim outlook for real estate. FILE PHOTO | NMG
Investment firm Cytonn has painted a grim outlook for real estate, citing oversupply and reduced access to credit.
The
2019 first quarter survey conducted by its Cytonn Real Estate
registered a slowdown in office and retail at 0.1 percent and 0.5
percent respectively to stand at eight percent and 8.5 percent
respectively due to a surplus of 5.2 million square feet and two million
square feet respectively compared.
“Limited access to
financing by developers and end-users saw credit register a paltry 3.4
percent growth compared to the five-year growth between 2014 and 2018
that registered an average uptake of 12.4 percent per annum,” it said.
The report said new investments by foreign companies and the
growing middle-class as well as the government’s planned affordable
housing programme had excited the residential housing space, opening up
new areas for development.
Cytonn said the next
frontier of fast growth and high returns was lower-middle to low-income
earners housing space within the residential sector.
Devolution, it said, was also expected to boost new investments as more funding opens up new areas.
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