Kenya could import ‘fundis’ in the future

An alarm has been sounded over a looming shortage of fundis following the conversion of technical training colleges to universities. Mr Andrew Saisi, the National Housing Corporation managing director, says such colleges are now offering white collar courses at the expense of skilled training, creating gaps which have now become all too common in the construction industry.

“We expect a shortage of artisans to be dire as construction picks up. This mismatch between supply from the few institutions and higher demand by the industry is leading to possible importation from abroad,” he said.

Speaking at a Royal Institute of Chartered Surveyors thought leadership meeting last week, Saisi singled out professionals for the low uptake of alternative building technologies (ABTs).

“A lot of professionals were trained in the old system and have not upgraded their skills, hence cannot promote the idea. The fundis/artisans,who take 90 per cent of the workforce are also not professionals when it comes to ABTs,” he said. However, according to the NHC boss, all is not lost: “Developers now consider cost and speed as key objectives now than in the past and we expect industrial technology and prefabrication to outpace conventional construction in the future.”.

Elsewhere, laws have been blamed for hindering the growth of real estate investment trusts (Reits). “There are currently only three licensed trustees. The four per cent stamp duty imposed on the total value of the project, 16 per cent VAT, five per cent Capital Gains translating to 32 per cent of the I-REIT cost is expensive,” said Peter Waiyaki, a lawyer.

Reits growth

Waiyaki was speaking at the third annual East Africa Property Investment (EAPI) summit in Nairobi last week.

Reits were first introduced in 2015 by Stanlib Investments through Fahari I-Reit, which sought to buy Greenspan Mall in Nairobi by targeting to raise Sh12.5 billion but only managed Sh3.6 billion.

A new entrant in the Reits field is Fusion Capital, which plans to build the Sh3.7 billion Greenwood City in Meru.

This came even as participants agreed that the East Africa property market has seen an upward growth in terms of completed developments and capital investments. This is despite funding challenges.

“We have seen a distinct shift in momentum from West Africa to East Africa. This has been driven by economic uncertainties in those markets, whereas our markets have relatively strong growth prospects and currency stability,’’ said Anthony Lewis, head of capital markets for Jones Lang LaSalle.

“The greatest challenges for property investors would be access to cost-effective funding and understanding the dynamic nature of regulatory environments in Sub- Saharan Africa,” said Gerhard Zeelie, Africa’s head of real estate finance for Standard Bank.

According to Kenneth Kaniu, chief executive officer, Britam Asset Managers, Tanzania remains a difficult market to penetrate because of non-local land ownership regulations and tax regime.