Property sector to continue positive growth trajectory in 2019

Caleb Mugendi, Assistant Head of Investments at Cytonn Asset Managers. Photo: Cytonn.
Source: Original

In line with its commitment to client-focused operation, Cytonn Investments held its quarterly Company Updates on site at The Alma on Saturday, April 27.

During the event, attendees were apprised of market performance so far in 2019 and given the outlook for the rest of the year.

The Economy

The company predicted that the economy would keep doing well. However, growth will likely be slower in 2019 compared to 2018. This is partly because of the delayed long rains, which affected planting throughout the country and by extension, harvests.

Another reason is the global rise in fuel prices. Even so, the economy will continue to grow due to positive investor interest in the sub-Saharan markets, stable interest and inflation staying within the government target.

Real Estate

According to Cytonn, the real estate sector will continue to grow in 2019 through the efforts of private developers and the government (public private partnerships).

The company mentioned that their own developments were doing well, with The Alma in Ruaka already 90% sold and Phase 1 expected to be handed over later this year.

In addition, the government’s pledge to deliver 500,000 housing units will see industry bloom even more.

Grace Weru addressing clients. Photo: Cytonn.
Source: Original

Government Borrowing

As for government borrowing, Cytonn painted a grim picture, forecasting that KRA would not be able to meet its collection targets, forcing the government to take on additional debt in order to plug the deficit.

Even more distressing is the fact that IMF raised Kenya’s debt risk distress from low to moderate. With this higher risk ranking, loans will be more expensive or have stricter terms.

Security

It was not all bad though, with the country’s security expected to be upheld. Cytonn reported that with the current calm political climate and lifting of travel advisories, the international community is confident of Kenya’s security. This is despite the terror attacks experienced in January this year.

Sectors to watch

Overall, Cytonn affirms that the five sectors that will shape economic growth are agriculture, manufacturing, real estate, construction and the hospitality industry. Interestingly, all five are related in one way or another to the government’s Big 4 Agenda, with universal healthcare being the only pillar that is not represented.

Clients follow the event proceedings. Photo: Cytonn.
Source: Original

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Source: Tuko.co.ke