Investment firm Cytonn has painted a grim outlook for real estate, citing oversupply and reduced access to credit.
The 2019 first quarter survey conducted by its Cytonn Real Estate registered a slowdown in office and retail at 0.1 percent and 0.5 percent respectively to stand at eight percent and 8.5 percent respectively due to a surplus of 5.2 million square feet and two million square feet respectively compared.
“Limited access to financing by developers and end-users saw credit register a paltry 3.4 percent growth compared to the five-year growth between 2014 and 2018 that registered an average uptake of 12.4 percent per annum,” it said.
The report said new investments by foreign companies and the growing middle-class as well as the government’s planned affordable housing programme had excited the residential housing space, opening up new areas for development.
Cytonn said the next frontier of fast growth and high returns was lower-middle to low-income earners housing space within the residential sector.
Devolution, it said, was also expected to boost new investments as more funding opens up new areas.