Centum Investment Company says it has decided to sell land and property at the cost of 12 billion shillings in the next three years.
The company says the move is aimed at reducing its exposure to the real estate market. Currently, 65 percent of the assets owned by the company are in real estate.
The real estate sector in Kenya is among the sectors that have been hard-hit by the covid-19 pandemic leading to the reduction in sales, rent yields as investors look for other safe havens to secure their wealth.
Centum targets to sell assents held in real estate at the cost of 2 billion shillings by March 2021 with the biggest sale planned to take place in three years at the cost of 10billionshillings.
As of June 2020, Centum has already raised 4 billion shillings from the sale of some of its properties. The company owns 29.1 percent of Two Rivers Mall as well as land and residential in Kiambu, Kilifi, and in neighboring Uganda.
Average rental yields softened across all sectors in Kenya according to a report by Cytonn, coming in at 7.4, 7.3, and 5.1 percent, for retail, office, and residential sectors, respectively, from 7.7, 7.8, and 5.2 percent in Q1’2020.
The land sector recorded an overall annualized capital appreciation of 1.4 percent, with asking land prices in low rise residential areas recording the highest annual growth at 3.8% driven by the increased demand for affordable land.
According to the report, constrained financing, supply chain constraints, and reduced revenues arising from slow market uptake and downward pressure on prices and rents due to the ongoing COVID-19 pandemic are expected to remain as the main challenges facing the real estate sector.
“The residential sector remained relatively stable with most sectors softening in performance, albeit marginally. Dagoretti, Ridgeways, and Westlands recorded the highest annual price appreciation at 3.1, 3.0, and 1.6 percent, respectively”, said Wacu Mbugua, Research Analyst at Cytonn.