https://www.standardmedi...robi-dip-by-27-per-cent

Land and property prices in Nairobi and it's environs are self-correcting due to market forces with a report revealing a drop of upto 27%.

A recent Macro Strategy Report published by EFG Hermes, a financial service company, which analysed land prices in the high-end market segment, upper-middle and satellite towns found that the pricing was significantly lower in the first quarter of 2021 compared to the past four years.

It notes that prices of residential and commercial property in Nairobi’s satellite towns have dipped since quarter four of 2019. “Could this represent the early signs of a deeper correction in high-end property prices?” posed the report.

The report says the property market in the country is overvalued, noting that the Covid-19 pandemic has seen distressed properties sale for less than their initial valuation.

The survey notes that the current land prices in the high-end segment are significantly lower than their peak levels over the past four years. “Notably, Quarter One (Q1) of 2021 land prices in Runda were 27 per cent below their recent peaks in Q4 of 2017,” reads the report in part.

“In the middle-income segment, current land prices are also lower than their peak levels over the past four years, but not by as much as the high-end segment.”

Prices in Runda have dropped way below the initial prices in Q4 of 2014. The report notes that while current land prices in Parklands and Westlands have changed from their peak levels over the past four years, current land prices in Upper Hill - Nairobi’s most expensive suburb are 13 per cent below their peaks in Q4 2017.

“Donholm stands out within the other segment for being the only suburb that has continued to see its land prices materially appreciate since Q4 2017,” noted the survey.

The report says on the performance of suburb land prices in Nairobi, between Q4 2017 and Q1 of 2021 all have underperformed the Consumer Price Index (CPI) which is 20 per cent.

“This has to be concerning for the outlook of the property market in Nairobi’s suburbs,” it reads.

Does anyone know who their local bankers are? Which bank has loaned them money?

Disgruntled former employees ama whistle blowers?

Anyway i identify with their sentiments, never understood reason for selling cash cows and investing/buying cash hogs and that coal plant that was bound to be controversial?

The valuations and revaluations yoy looked suspect and the debt levels......

Wish all those inside well!

I believe Amu Power was already completely written off last year (FY2020) and doesn't count on the balance sheet (PE portfolio). This can be confirmed from the last two annual reports.

https://citizen.digital/...losses-amu-power-305745/

Thanks. I see they have not borrowed from their own bank, Sidian.

Well, good information but motives are suspect. The ex employees had to wait to be sacked to whistle blow, they were complicit and party to the huge bonuses shareholders complained about few years back. It is reassuring that they admit "The market cap of the company at the NSE of KES 12 BILLION is actually a true reflection of the company’s actual net asset value as opposed to the book NAV indicated in the company’s financials of KES 60 BILLION" that translates to a P/B ratio of 1 which is not bad.

Sidian is a small bank + it would not be kosher to borrow from Sidian + Sidian can't match the rates offered by the big banks.

They should sell Sidian to Equity of KCB and pay down some of their debt.

Covid really threw a wrench to the borrow big and invest in Real Estate business model. Evergrange, Cytonn, Centum, Muraya's etc.

The current board doesn't have skin in the game.

Centum's management has been discussed severally here in Wazua. Basically this is a classic case of a company for the benefit of management in stead of shareholders.
It's a classic agency problem.
Very similar to how trustees of Njenga Karume's estate enriched themselves while the beneficiaries were left suffering. Very similar to how some Kenya government employees use their position to profit from the state by inflating prices and receiving kickbacks.
Not too long ago, Centum was the billion shilling bonus company. Shareholders have had massive erosion of value since then and ofcourse the management will not return the billions in bonuses they've received in the meantime.