News
Real estate boom under new EA Market
Free markets and investor protection will attract regional and global capital flows. Photo/FILE
Risks associated with the real estate business in East Africa are expected to come down following the coming into force of the Common Market Protocol.
According to Kenya’s real estate players, the huge regional market provided will help firms diversify their activities, making it easier to manage risks.
Under the Protocol, cross-border investment has been made easy as companies can freely open branches in other East African states, or even partner with those carrying out similar businesses.
Already, a number of Kenyan firms are planning to open branches in Uganda, Tanzania and Rwanda.
A few others that have been operating mainly in Uganda and Tanzania say the Common Market will make it “easier and cheaper” to operate in those countries.
“It is a very exciting time for professionals in the real estate sector in East Africa. From dealing with a market of 40 million people, we will now be dealing with one of 127 million people. That is huge. It will help us diversify and manage risks during difficult times,” said Reginald Okumu, director of Ark Consultants, a Nairobi-based real estate firm.
He cited some of the risks as low demand in a given market, poor economic performance, and political instability.
“When one market is not doing well, you can mitigate the losses by relying on the vibrant markets of other partner states,” he said.
Mr Okumu said the Common Market would make it easier for professionals to travel within partner states and work in any country they choose.
This, he said, used to be difficult because of work permit requirements.
“Most of us used to hide under “tourist and visitor visa”, which sometimes never worked,” said Mr Okumu, whose firm plans to open a branch in Kigali, Rwanda, soon.
The Protocol came into force on July 1 and provides for free movement of people and labour.
This means citizens of East Africa will move freely across the region and work in any member state without the need for a work permit.
On June 30, 2010, Kenya became the second EAC country after Rwanda to waive the work permit requirement for citizens of other EAC partner states.
A number of Kenyan companies — among them KCB, Nakumatt Supermarket and Equity Bank — have already set up shop across the borders.
