Connect with us

General News

Kenya: ESG Set to Drive Real Estate Sector Forward, Industry Players Say

Published

3 years ago

on

[ad_1]

Nairobi — Environmental, Social and Governance(ESG) factors have taken up as a key driver in the real estate sector, industry sector players have said.

Speaking during the 9th annual East Africa Property Investment(EAPI) Summit host, Kfir Rusin noted that this will be a driver following the said increased activity by local, regional and international investors in the market, despite the impact of Covid-19 and upcoming elections.

ESG focuses mainly on sustainability, which is a key focus with majority of investors nowadays.

According to Estate Intel’s Tilda Mai, the East African real estate market is being driven by flight to quality and the need for flexibility.

“For example, despite a supply glut in Nairobi’s office market, Grade A offices have continued to outperform other classes with some office parks such as the Garden city office park recording occupancy rates of up to 90%. The same can be said for Kampala and Dar es Salaam. With an influx of oil and gas occupiers expected in these markets, we expect demand for Grade A offices will only intensify,” she said.

Mwai noted that these trends are also trickling down to the logistics sector with demand for purpose-built warehousing increasing over the past 5 years.

Nedbank CIB’s Head of African Property, Gerhard Zeelie, commented that future developments are in danger of becoming irrelevant if they are not ESG compliant.

“Massively, European, US, Middle East investors are all focused on ESG and it is unlikely that assets will be marketable that do not comply with basic ESG.”

From an opportunity perspective, Zeelie confirms that it is actively pursuing opportunities in Kenya and the broader region with a specific interest in retail and light logistics.

As he commented, “Nedbank is increasing our presence in the market and we are focusing on light industrial and retail.”

And while the market has shown resilience this year’s event is critical to the future prosperity of the sector as it provides a much-needed platform to engage and reconnect the network, he adds.

Echoing his peers in the banking sector, Standard Bank’s Head of Real Estate Finance Africa Regions, Niyi Adeleye; however, believes it is increasingly critical to consider ESG, not from a purely green perspective.