The construction industry represents the majority of the Kenyan market. This presents various opportunities and with the opportunities come opportunity costs.
East Africa, generally the fastest growing region of the continent is ripe for development. Over the past two decades, Chinese financiers have helped to bridge Africa’s construction financing gap, with China estimated to be the single largest financier of African infrastructure.
Kenya
In Kenya’s capital, the least costly category for construction was basic warehouse or factory units which cost $337(kshs 33700) per square metre. This is deceptively low as a large warehouse distribution centre or a high-tech factory would cost $471(Kshs 47100) and $962(Kshs 96200) per sqm respectively.
Construction of car parks
Construction of car parks is also cost-friendly based on the numbers as a multi-story underground car park costs $394(Kshs 39400) per sqm while a multi-story above ground car park would cost $361(Kshs 36100) per sqm. For interests in the education sector, construction of primary and secondary education facilities cost $433(Kshs 43300) per sqm while building universities and colleges cost $481(Kshs 48100) per sqm.
Commercial Property
For commercial property, the cost of constructing offices in a business park was $577 (Kshs 57700) per sqm. Medium A-grade offices in the CBD with up to 20 floors cost $625(Kshs 62500) whereas for high-rise prestigious offices in the CBD, and investor would have to put in $789 (Kshs 78900) per sqm.
Construction of hotels
Hotels cost more than hospitals to build. A 3-star travellers hotel costs $933 (Kshs 93300) per sqm to build, a 5-star luxury hotel, however, costs much more at $1236 (Kshs 123600) per sqm while a resort style property costs $1250(Kshs 125000) per sqm. Comparatively, a daycare centre (including basic surgeries) costs $817(Kshs 81700) per sqm and a regional hospital costs $962 per sqm.
A general hospital e.g. a teaching hospital costs $1159 (Kshs 115900) per sqm. It remains to be seen whether the number of hospitals will exceed the number of hotels in the country.
Residential property
Residential construction forms the bulk of the construction in the country. The numbers follow like so. The cheapest to construct are aged care/affordable units which cost $433(Kshs 43300) per sqm. These are followed by individual detached or terrace style house of medium standard which cost $500(Kshs 50000) per sqm while individual detached houses of prestigious standards cost $721(Kshs 72100) per sqm.
Medium standard townhouses and low-rise apartment both cost $529(Kshs 52900) per sqm while high-rise apartments cost $625(Kshs 62500) per sqm. In retail, a neighbourhood supermarket would cost $529(Kshs 52900) per sqm while a large shopping centre including a mall costs large shopping centre including mall costs $625(Kshs 62500) as of 2017.
A prestige car showroom would cost $646(Kshs 64600) per sqm. Airports are the most expensive to build with a basic service low-cost carrier terminal costing $1834(Kshs 183400) per sqm while a full-service domestic terminal costs $2567(Kshs 256700) per sqm.
Steel beams cost the most at $1635(163500) per tonne for a job requiring over 100 tonnes. Labour costs are range between $5(400) for the general labourers to $15(1500) for the site foremen. The cost escalation is expected to be 1% during the 2017-2018 year. Generally, contractors earn a profit of 8.5%.
The costs are on pure approximate, if you want to construct in Nairobi you will have to be affiliated with a real estate company like Kenya Homes in order to get more information.
