Is Kenya still East Africa’s success story and how we move to the next level- was the question we sought to discuss and debate at the GRI in South Africa.
I co-hosted the session jointly with three East Africa-based developers involved in different categories. Two are active in Dar-es-Salaam and one in Nairobi. The panel of hosts was evenly drawn in terms of location – two Nairobi based and two based in Dar-es-Salaam, so it was possibly natural that the two cities were discussed and compared at length.
JLL’s reasoning for basing their East Africa hub in Nairobi was the question posed to start off the discussion.
A vibrant and active real estate development industry, availability of young educated population, developed infrastructure and ongoing large infrastructure projects, Nairobi’s position as a technology leader are some of the reasons that advise the timing and choice of JLL’s hub location. In addition to this, many of the multinationals that form JLL’s client base and those JLL seek to add to its client base have adopted Nairobi as their regional hub. The ease of connectivity to the rest of Africa and the world adds to the appeal of the city for JLL and other global companies.
The JLL March 2015 City Report on Nairobi provides a view of some of these considerations and can be accessed here http://www.africa.jll.com/africa/en-gb/research/116/nairobi-city-report
Delegates that have an interest in East Africa offered additional reasons and considerations, such as:
- Security of title for landowners/investors and the steps the government is taking to make access to the Land Registry and transactions on land much easier
- Availability of better quality commercial space
- The growing middle class was also an explanation for the uptake on Retail Malls (Kenya-7%, Tanzania -4% and Uganda <2%)
- The role of the NSE and legislation on REITs
How do we move to the next level?
The impact of insecurity and corruption were mentioned as 2 areas that impact Nairobi’s position. Efforts by government and the contribution of private sector in eliminating corruption are key in moving to the next level. Insecurity and travel advisories that have been issued as a result of security incidents have seriously affected tourism, hotels and hospitality as well as other related service sectors.
A delegate, who is an advocate practicing in Kenya, spoke about identifying the right partners and ensuring appropriate due diligence is carried out as some of the ways to guard investors against implication in actual or perceived corruption from associations.
The discussions were robust with delegates’ views supportive of the idea that Nairobi remains East Africa’s success story, and acknowledging Dar-es-Salaam in competition, noting significant steps to secure investment in land and easing of access to quality work force necessary.
Kampala, Addis Ababa and Kigali were also mentioned in some of the conversations, with the ease of doing business in Kigali acknowledged as a positive that the rest of East Africa should borrow from.
Coincidentally, a few days following the GRI conference, government’s effort in enabling access to services through the Huduma Centres won a UN award for improving the delivery of public services.