Kfir Rusin, the general manager of Africa Property Investment Summit.[PHOTO: JAMES WANZALA/STANDARD]
What was your initial impression of the local real estate market when you first came to Kenya?
I don’t think I truly grasped how sophisticated the Kenyan market was on my first visit until I travelled across the rest of Africa. You have a certain level of sophistication in terms of having a lot of real estate professionals, many local developers both in the housing sector and upcoming sectors like the hospitality industry.
There is a lot of good positive steps being taken by the government in terms of providing infrastructure and putting in place necessary regulations.
How does that compare with South Africa where you are based?
They say Johannesburg is a world-class African city. I think it is a testimony to the infrastructure and development that has been done there. But if you were to say South Africa or Johannesburg is the most evolved market – which it is in terms of infrastructure – I would say Nairobi would be the next hub in sub-Saharan Africa after Johannesburg. We are seeing that in terms of the multi-nationals coming to Nairobi.
How much longer do you think that is likely to take?
Unfortunately, in Africa, things tend to slow down during an election year. Kenya is not an exception.
I think there will be a short slowdown, but the growth signs are good. I think the next three to five years will be critical.
Once the Standard Gauge Railway and other infrastructure developments start operating and we start to see the benefits of that, Nairobi will start to be a global player.
Has there been any change about your first impression of Kenya’s real estate since you first came to the country early last year?
One thing that has since changed is sentiment. When I first came, there was so much optimism about the market. However, people have started asking questions: Is the retail market oversupplied? Are there too many new offices? How are the elections going to affect real estate? Instead of people saying, “Let’s build”, they are asking more hard questions.
I think the perception and sentiments are a little bit less positive and perhaps more realistic, which are signs of a maturing market.
But it is short-term, this being an election year.
You first came to Kenya in January last year because of your involvement with the East Africa Property Investment Summit…
Yes. We have property summits across Africa and the East Africa conference is always held in Nairobi. I am usually in Nairobi once a month for six months in the lead-up to the summit.
Tell us a little bit about the East Africa Property Investment Summit and what it hopes to achieve
This is our fourth year in Nairobi. This year’s summit will take place on April 5-6 at the Radisson Blu Hotel. The summit was started by Africa Property Investments, which holds regional investment summits, across sub-Saharan Africa.
The summits bring together all the people involved in the property value chain in a two-day event to discuss opportunities and solutions to the challenges. The ultimate goal is to drive growth and development in the region by connecting key stakeholders so that they can forge business partnerships.
This year’s summit will have over 100 speakers. Why bring such a big number of speakers for a two-day event?
We want to get all the different viewpoints. For example, for a discussion on housing, we want to have a developer, a financier, someone from a Public-Private Partnership unit, and an investor. This will give varied viewpoints and and angles for each topic. This enriches the summit and the discussions.
Many Kenyans feel houses are overpriced. From an outsider’s perspective, what is view?
Affordability is relative. How expensive a house is, is measured relative to people’s income and what they can afford. In that respect, I think there are certain areas/segments where prices are hitting the peak. I think this is because land prices have shot up, construction costs are huge.
Developers are spending 20 per cent to 40 per cent to build infrastructure. That is unfortunate because the cost of putting up infrastructure should be shared between the developer and the government. I think the ongoing collaboration between developers and county governments will bring down land prices, leading to production of houses that are affordable to the masses.
Is lack of affordable housing a shared problem in Africa?
It is a common problem across sub-Saharan Africa and is not unique to Kenya. I think there is misalignment of priorities: Private developers have the skill set and know-how to produce affordable housing.
But they need institutions and governments to provide subsidies, land, infrastructure and amenities. Because the markets are emerging, it seems governments have so much on their hands and unfortunately housing is not their top priority. Bridging the housing gap will take time.