The value of new building plan approvals within Nairobi County slumped to a 20-month low of Sh8.6 billion in January this year, levels last seen in May 2023, on the back of sustained contraction of the country’s construction sector.
New data from the Kenya National Bureau of Statistics (KNBS) indicates that the value of January approvals in Kenya’s capital dropped 60.1 percent in reference to the Sh21.4 billion worth of buildings okayed in December last year.
During the month under review, developers obtained Sh6.1 billion worth of approvals for the construction of residential units, while 2.5 worth of approved plans were for the construction of non-residential buildings.
The suppressed value of new approvals came even as details emerged that Kenya’s construction sector contracted for two consecutive quarters last year, in a bleak performance that was last seen 22 years ago during the reign of then President Daniel Moi.
“The intention by developers to put up building units is usually driven by demand. The slowdown in January could be largely informed by prospects of low demand in coming months,” notes Homes Universal chairman Daniel Ojijo.
“This could also be a reflection of schedules that Nairobi County officials use in issuing new approvals. Remember this also comes at a time when there’s uncertainty about the implementation of a new zoning policy and this could see investors hold back a bit,” he adds.
In September last year, the Architectural Association of Kenya (AAK) said there haven’t been clear guidelines on approvals which has seen developers hold back from pursuing construction.
“Delayed approvals up to more than one year have led to losses since one cannot start the project on time,” AAK President Florence Nyole said.
The Nairobi County government is considering enacting a zoning policy that could allow buildings within the Central Business District (CBD), Upper Hill, and other key commercial areas to rise as high as 75 floors.
In the draft policy, other areas have been assigned specific limits with Riverside, Parklands and Ngara West set at 20 floors while Muthangari, Kileleshwa, and Kilimani are capped at 15 floors.
Unlock a world of exclusive content today!Unlock a world of exclusive content today!
