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Recent Topicals

Nairobi Metropolitan Area (NMA) Serviced Apartments Report 2022

Nov 27, 2022

In 2021, we published the Nairobi Metropolitan Area Serviced Apartments Report 2021, which highlighted that serviced apartment’s average rental yield grew by 1.5% points to 5.5%, from the 4.0% recorded in 2020. This was attributed to an increase in monthly charges per SQM by 0.7% to Kshs 2,549, from Kshs 2,533 recorded in 2020, coupled with an increase in occupancy levels by 13.5% to 61.5%, from 48.0% recorded in 2020. The improvement in performance was attributable to increased demand for hospitality facilities and services as a result of the reopening of the economy, the return of international flights, and the improved rent collection amounts by serviced apartments that had previously been issuing discounts to attract and maintain clients. This y...

Kenya’s Credit Reference Bureau Framework

Nov 20, 2022

Last week, in our Cytonn weekly #45/2022, we took a look at Kenya’s Private Sector Credit growth, in which we highlighted that, currently at 26.1% of GDP, Kenya’s Private Sector Credit continues to lag behind other economies. In 2020, Kenya’s Private Sector Credit growth at 32.1% of the GDP was outperformed when compared to advanced economies such as the United States of America and Japan at 216.0% and 192.8%, respectively, as well as Sub-Saharan economies such as South Africa and Mauritius at 112.0% and 95.9%, respectively. The graph below shows the comparison of Kenya’s domestic credit extended to the private sector as a % of Gross Domestic Product (GDP) in 2020 against other select economies; Source: World Bank We recommended that, there is need to streamline t...

The Private Sector Credit Growth

Nov 13, 2022

In Kenya, like every other country in the world, adequate credit to the private sector plays an important role in economic growth by ensuring that there is efficient allocation of resources for investment. Subsequently, for an economy to function well, there should exist alternative sources to provide private sector credit, and the government through its regulatory and legislative arms should provide an enabling environment for businesses to grow and providers of capital to compete. In Kenya, the main provider of capital to businesses is the Banking sector, estimated to provide 99.0%, while alternative sources provide a combined 1.0%. Private sector credit from the banking sector currently stands at Kshs 3.3 tn, equivalent to approximately 26.1% of the GDP. This continues to lag behind other advanced economies such as USA and Japan where the Private sector credit to GDP ratio stood at 216.0% and 192.8% respectively in 2020. Closer to home, in economie...

Unit Trust Funds Performance, Q2'2022

Nov 6, 2022

Unit Trust Funds (UTFs) are Collective Investment Schemes that pool funds from different investors and are managed by professional fund managers. The fund managers invest the pooled funds in a portfolio of securities with the aim of generating returns to meet the specific objectives of the fund. Following the release of the Capital Markets Authority (CMA) Quarterly Statistical Bulletin-Q3’2022, we analyze the performance of Unit Trust Funds, as the total Assets Under Management (AUM) have been steadily increasing and they are among the most popular investment options in the Kenyan market. We will further analyze the performance of Money Market Funds, a product under Unit Trust Funds. In our previous focus on Unit Trust Funds, we looked at the

Nairobi Metropolitan Area Mixed-Use Developments (MUDs) Report 2022

Oct 30, 2022

In November 2021, we released the Nairobi Metropolitan Area Mixed-Use Developments (MUDs) Report 2021, which highlighted that Mixed-Use Developments (MUDs) recorded an average rental yield of 7.2%, which was 0.7% points higher than the 6.5% rental yield for the retail, commercial Office and residential themes in 2021. The relatively better performance was mainly attributed to; i) an improved business environment, ii) strategic and prime locations of the developments with the capability to attract prospective clients, and, iii) preference by target clients due to their convenience hence improved demand and returns to investors. This week we update our report with the 2022 market research that was conducted in 8 nodes within the Nairobi Metropolitan Area (NMA), in order to determine the progress and performance of MUDs against the market...