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Recent Topicals

Proposed Crowdfunding Regulations in Kenya

Aug 15, 2021

The Cabinet Secretary for the National Treasury and Planning, through the Capital Markets Authority (CMA), recently published the Draft Capital Markets Investment Based Crowdfunding Regulations, 2021. The proposed rules seek to regulate the raising of funds through online platforms by licensing and approving all persons who operate or intend to operate an investment-based crowdfunding platform. Given that these are new regulations in the capital markets, we found it necessary to demystify the proposed regulations and give our insights on them. We shall do this in five sections, namely: Introduction to Crowdfunding, Review of the draft regulations, Case Study – Australia, Recommendation, and, Conclusion

Role of Trustees in the Capital Markets in Kenya

Aug 8, 2021

On 29th June 2021, the President of Kenya assented to the Finance Act, 2021 which amongst other changes, introduced provisions for the registration and regulation of corporate trustees in the retirement benefits industry. While registered companies were allowed to act as corporate trustees under the previous Retirement Benefits Act, the Finance Act now clearly outlines the registration process of trustees, as well as the criteria for their suitability. Additionally, in 2020, the Capital Markets Authority (CMA) granted a no-objection to Goal Advisory Africa Limited, the first non-banking institution, to act as a Collective Investment Scheme (CIS) Corporate Trustee. Traditionally, only banks had been allowed to act as CIS trustees, with only 5 licensed banks approved to offer trusteeship services. Key to note, there are other types of trustees who do not need approval or licen...

Nairobi Metropolitan Area (NMA) Land Report 2021

Jul 25, 2021

In July 2020, we released the Nairobi Metropolitan Area Land Report 2020 which highlighted that in 2019/2020 the land sector recorded an annual capital appreciation of 1.5%, compared to the price correction of 0.3% recorded in 2018/2019, attributed to increased demand for land mainly in the low rise residential areas and satellite towns. Asking land prices in low rise residential areas recorded a 3.8% capital appreciation y/y, attributed to the availability of development land in these areas. Additionally, people are attracted to these areas as they are sparsely populated, thus offering exclusivity and privacy. Unserviced land in satellite towns such as Ruaka also recorded a capital appreciation of 3.8% y/y, attributable to the growing demand for land in these areas fueled by the demand for housing by the growing working population as the areas act as Nairobi&rsqu...

Real Estate Bubble

Jul 18, 2021

In the beginning of 2020, we set out to address the speculation that the Kenyan market was experiencing a real estate bubble through a topical Is There a Real Estate Bubble in Kenya? We determined that there was no real estate bubble in Kenya since the market was still constrained by issues such as i) unavailability and unaffordability of credit , ii) tight credit underwriting standards from high number of non-performing loans, iii) low accessibility to mortgage financing, and, iv) slow provision of affordable housing. Thus, the sector was just experiencing the normal real estate cycles and the rapid price increments was as a result of low supply and high demand, and vice versa in select sectors. This week, we again seek to address the same concerns on whether the Kenyan market has experienced a real estate bubble through a topical as outlined below; Introduction to real estate bubble ...

Land Sector Cytonn H1’2021 Markets Review Note

Jul 14, 2021

Land prices in low rise residential areas recorded highest price appreciation of 4.9 % in H1’2021 compared to a market average of 1.6% During H1’2021, the land sector recorded an overall annualized capital appreciation of 1.6%, with asking land prices in low rise residential areas recording a 4.9 % annualized capital appreciation, attributed to the relative affordability of land valued at Kshs 88.3mn per acre compared to high rise areas selling at Kshs 132.7mn per acre.  Other factors making the areas attractive to people is the fact that they are sparely populated thereby offering exclusivity and privacy. Land in the commercial zone recorded a (3.7%) price correction to approximately Kshs 131.0 mn per acre compared to Kshs 133.0 mn per acre due to reduced demand for land in commercial zones as most developers have put on hold their activities as they await the absorption of the current office supply with the over...