Kenya tops East Africa with most infrastructure projects last year

Kenya had the highest number of infrastructure deals in East Africa last year on the back of mega real estate projects and the standard gauge railway, says a report by financial consultancy Deloitte.

The Africa Construction Trends report 2015 says that there were some 61 reported infrastructure projects in the region worth Sh5.9 trillion ($57.5 billion), an amount nearly equivalent to the size of Kenya’s gross domestic product.

Kenya had 20 reported infrastructure deals, followed by Ethiopia which had 12 projects but Deloitte did not give a breakdown on the value of projects per country.

The survey looked at reported infrastructure deals worth at least Sh5 billion ($50 million) that had broken ground by the start of June 2015.

Deloitte’s report said the growth in shopping malls, commercial office development and the rail project are the biggest areas with the large construction works going on.

“There have also been some changes in the retail estate sector where countries such as Kenya and Tanzania are experiencing significant growth in retail, entertainment and lifestyle facilities, modern office parks, and hotel space,” said the report.

The changes can be attributed to expansion in cities and a growing middle class, high yields in retail property rentals, technology innovation and sustainability with a drive toward green and open spaces, growth of ‘new urbanism’, increased foreign direct investment, and a shortage of quality property.

Similar report have also found that retail space development in Nairobi has rapidly increased over the last few years driven by heavy consumer spending.

The Shop Africa 2016 report by Knight Frank found that Nairobi had the hottest retail property market outside South Africa.

“Among the cities covered by this report, Nairobi stands out as a major focus for shopping centre development. It is ranked as the largest market by existing shopping centre floor space and it has the biggest development pipeline,” said the report.

Since the June 1, 2015 cutoff date there have been other mega deals on the real estate sector that have been announced such as the construction of Avic’s African headquarters in Nairobi.

Chinese conglomerate Avic announced that it would construct a 43-storey office block in Nairobi, a hotel with 35 floors and a 25-storey apartment complex in the Westlands area of the city. The project is worth Sh20 billion.