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Saturday, June 24, 2017

Students, middle class hit hard by housing shortage

Edwin Dande Cytonn Investments
Edwin Dande Cytonn Investments

Students and middle income earners are the most affected by the country’s housing shortage whose shortfall is estimated at 200,000 units annually.

This is according to a report by investment management firm Cytonn Investments released yesterday.

Cytonn said in its first quarter report for the year that preference for the suburbs among most city residents has led to a revolutionary growth in housing and a surge in commercial property.

The investment manager, which recently launched its real estate subsidiary, further noted in the report that demand for quality office space is on the rise because of many multinationals setting up in Nairobi.

“We continue to see a shortage of affordable housing, estimated to be around 200,000 units per year, for middle-income earners as well as for student accommodation,” states the report.

Two weeks ago the firm announced the launch of its sister company, Cytonn Real Estate, which has already embarked on development of two property projects.

Although Cytonn did not reveal the details of the two projects it hinted about having an interest in mid-income housing, adding that there was a serious shortage of decent homes to rent for between Sh20,000 and Sh40,000 with good security, sewer system, infrastructure and water supply.

In a market assessment report issued last month, Cytonn said real estate assets posted an average return of 23.8 per cent over the last five years and projected that this asset class will earn the highest returns in future, based on such performance.

Cytonn said the shortage in mid income and student housing was because there is not enough institutional capital being offered for these segments, adding that its real estate business will fill this gap.

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