Coronavirus disrupts Kenya’s Sh1.2tn construction

Since the confirmation of the first Covid-19 case was confirmed in Kenya on 13th March 2020, the coronavirus pandemic has impacted the workforce, property market and the economy with varying effects. With the ongoing coronavirus pandemic, a lot of unprecedented disruption has been witnessed in the Kenyan economy. The real estate sector has been experiencing a downturn attributed to the lockdown measures and reducing income by majority of Kenyans. The Covid-19 impact on the sector has been disruption of supply chain, reduction of the labor force, reduced construction activities and reducing funding to the real estate sector due to the risk disinclination due the coronavirus pandemic.  Coronavirus disrupts Kenya’s Sh1.2tn construction


The Covid-19 has increased certain trends that were already visible in the real estate sector. There has been a significant slowdown in the absorption of office space in 2020 as many private sectors and organisations are  handing the coronavirus pandemic. There has been a delay on lease start dates due to the postponement of important business decisions. A decline of house sales and rental prices has mainly been attributed  to the already existing market conditions. Measures taken by the companies to mitigate costs have made it difficult for tenants to afford their living space. The construction and completion of projects has been affected by delays in the global supply chain, delay in labor shortages, delay in receipt of  funds and safety concerns. Coronavirus disrupts Kenya’s Sh1.2tn construction


Major disruptions in the real estate sector included decline in construction materials, reduced working hours and lower demand for housing. There has been a decline in project financing due to the uncertainty surrounding the completion of projections. This has further impacted construction and the real estate sector. The public housing projects are also expected to be impacted by the coronavirus pandemic as the government provides funds in response to emergency interventions. The Covid-19 is expected to lessen the uptake of houses attributed to financial uncertainty in 2020. Coronavirus disrupts Kenya’s Sh1.2tn construction

Last week, according to Credit Rating Agency Agusto & Co. Limited said it expects the Big 4 Agenda to be sacrificed as more resources are meant to deal with the spread of Covid-19. The government had to reduce the Big Four’s budget to Sh127.3 billion from Sh450 billion. According to Blomberg, the government will divert resources from the Big Four Projects to fight the coronavirus pandemic. Coronavirus disrupts Kenya’s Sh1.2tn construction


The current coronavirus pandemic is expected to continue over a sustained period, thus affecting the occupiers of  real estate in unprecedented ways. This will have implications for the real estate sector. The impact of the pandemic on the real estate sector will be determined by its duration and measures by the government. Although there have been effects due to Covid -19, Kenya’s real estate sector is still unclear and developing each day.

Coronavirus disrupts Kenya’s Sh1.2tn construction