Impacts of Covid-19 to The Real Estate Sector

Governments, businesses and communities are facing the reality of Covid-19.  The real estate sector is also facing an impact of coronavirus.

The short-term impacts on economic growth, business activity and individual behaviour are undeniable.

However, we all agree that the global and local economy is set to bounce back after the pandemic.

The real estate sector is also experiencing impact of the pandemic, below are some of the impacts being experienced in our country;

Digitization in The Real Estate Sector

There is a decrease in one on one interactions due to social distancing as a result of Covid-19 pandemic.

All parties involved in real estate transactions are now considering digitizing some functions. For example, having clients sign documents online.

Impact on site Visits and Open Days

These are the days when investors have an opportunity to view the plots before purchasing.

However, due to the need of Social distancing you will find that not many companies are able to organize site visits.

They will now consider taking few clients per visit in company vehicles. Also, clients can also choose to self-drive to the project via Google Pins.

Increased demand for affordable properties outside cities and major urban centres

It has been evident that there is a lot of congestion in urban areas.

The safety measures that are being enforced may be impossible due to the number of Kenyans residing there.

A lot of Kenyans will now consider purchasing affordable land in outskirts of the city and settling their families where they know they are secure.

Delayed title deed processing

The Ministry of Lands has been partially closed in compliance with COVID-19 health measures.

This means that clients will experience delay in title processing. However, there is no cause for alarm.

All you need to do is make sure you sign all your land transfer documents with your investment company.

This will make your documents ready when the Lands Registry resumes operations.

Reduced demand for commercial properties

Buildings that were occupied by businesses servicing the tourism industry will experience a more direct impact.

The tenants in that situation may either absorb the cost, request for credit facilities or simply hand over the keys to the landlord.

However, some businesses have already adopted a work-from-home policy in order to ensure continuity of the operations due to the pandemic.

Co-working spaces or shared offices will also see lower traffic and a fall in demand in these current circumstances.

Effect on leases

Tenants may negotiate new rates for leases or reduce space requirements at the renewal.

In the wake of a possible stagnation as a knock-on effect of the virus, the valuations of the office properties could be impacted as future cash inflows from the rentals of the office spaces could thus be challenged.

Request for reliefs

Landlords will be faced with requests to provide relief to tenants.

This will call for an agreement that will realize a win-win for both parties.

In conclusion, this is the best time to invest in the real estate sector in Kenya as prices are lower and the sector will bounce back after the pandemic.

Governments, businesses and communities are facing the reality of Covid-19.  The real estate sector is also facing an impact of coronavirus.

The short-term impacts on economic growth, business activity and individual behaviour are undeniable.

However, we all agree that the global and local economy is set to bounce back after the pandemic.

The real estate sector is also experiencing impact of the pandemic, below are some of the impacts being experienced in our country;

Digitization in The Real Estate Sector

There is a decrease in one on one interactions due to social distancing as a result of Covid-19 pandemic.

All parties involved in real estate transactions are now considering digitizing some functions. For example, having clients sign documents online.

Impact on site Visits and Open Days

These are the days when investors have an opportunity to view the plots before purchasing.

However, due to the need of Social distancing you will find that not many companies are able to organize site visits.

They will now consider taking few clients per visit in company vehicles. Also, clients can also choose to self-drive to the project via Google Pins.

Increased demand for affordable properties outside cities and major urban centres

It has been evident that there is a lot of congestion in urban areas.

The safety measures that are being enforced may be impossible due to the number of Kenyans residing there.

A lot of Kenyans will now consider purchasing affordable land in outskirts of the city and settling their families where they know they are secure.

Delayed title deed processing

The Ministry of Lands has been partially closed in compliance with COVID-19 health measures.

This means that clients will experience delay in title processing. However, there is no cause for alarm.

All you need to do is make sure you sign all your land transfer documents with your investment company.

This will make your documents ready when the Lands Registry resumes operations.

Reduced demand for commercial properties

Buildings that were occupied by businesses servicing the tourism industry will experience a more direct impact.

The tenants in that situation may either absorb the cost, request for credit facilities or simply hand over the keys to the landlord.

However, some businesses have already adopted a work-from-home policy in order to ensure continuity of the operations due to the pandemic.

Co-working spaces or shared offices will also see lower traffic and a fall in demand in these current circumstances.

Effect on leases

Tenants may negotiate new rates for leases or reduce space requirements at the renewal.

In the wake of a possible stagnation as a knock-on effect of the virus, the valuations of the office properties could be impacted as future cash inflows from the rentals of the office spaces could thus be challenged.

Request for reliefs

Landlords will be faced with requests to provide relief to tenants.

This will call for an agreement that will realize a win-win for both parties.

In conclusion, this is the best time to invest in the real estate sector in Kenya as prices are lower and the sector will bounce back after the pandemic.