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Read the passage below and then answer the questions that follow.
The Kenyan real estate market has grown over the past two decades. This is demonstrated by its contribution to the country’s domestic product (GDP) which grew from 10.5% in 2000
to 13.8% in 2016. The growth was driven by factors such as improved roads, utility connections, upgrade of key airports and rapid urbanization. These factors have therefore led to development in the different real estate sectors.
One of the segments in the Kenyan real estate that has realized rapid growth is the office sector. This has been in line with the improving economy as firms expand their operations. This expansion has been brought about by the clientele changing their preferences to demand for world-class serviced offices. As the dynamics of office space design and demands continue to unfold, more developers are offering semi-fitted offices by providing facilities such as partitions and kitchen cabinets.
In addition, the retail business sector has also seen the continued growth of two key concepts, that is, the mall concept and the industrial parks concept. These concepts have developed to meet the changing tastes of the growing middle class. International and local developers have quickly grabbed the opportunity to tap into the ready market with the mall concept. This has made Kenya become the second largest provider of mall space in Africa. The most notable developments are the Two Rivers Mall, Garden City and The Hub.
On the other hand, the industrial sector has been receiving a gradual change that has led to the growth of modem industrial parks. These parks include Tatu City Industrial Park, Infinity Industrial Park and Tilisi. The growth of the parks has been due to a changing clientele who prefer high-quality products. The parks allow for modem retailing, distribution and manufacturing practices of high-quality products. The modern parks are also built in such a way that they allow for a concept known as Live, Work and Play. To achieve this, the new industrial parks are now moving to areas within Nairobi's periphery such as Kiambu and Machakos counties where they are easily accessible and are still near key airports and railway terminals.
Another real estate sector that has seen rapid growth is the residential sector which has recorded high demand due to the nationwide housing deficit. Currently, the nationwide housing deficit stands at 200,000 units annually and an accumulated deficit of over 2 million units. As a result, gated community estates are increasing with locations such as Kiambu and Machakos counties becoming favourites. In these estates, developers are increasingly applying low-cost housing construction methods such as alternative building technologies that are known to reduce construction costs by as much as 50%.
Dual branding is another concept in the real estate sector. This concept, which involves having serviced apartments and a hotel in the same building, is gaining popularity among investors. This is because the hospitality sector largely depends on tourism which has been experiencing an increase in the number of visitors. Meetings, incentives, conferences and exhibitions (MICE) have played a key role in increasing international tourists who are the backbone of the hospitality industry.
Infrastructural development has seen the value of land go up. Investors are increasingly buying land intending to sell in the future with the hope that value will have increased. Moreover, to attract buyers, developers are also adopting agribusiness as value addition to plots intended for sale and offering returns on a seasonal basis to clients.
Therefore, with the continued interest in the Kenyan property market by both local and international players, there is need to adopt measures to address issues that are hindering the growth of the sector. Such measures include continuous investment in infrastructure and improvement of the legal environment among others. If these measures are put in place, the Kenyan real estate will continue to improve and eventually cater for the housing deficit in the country.
Adapted from: www.cytonn.com, 12 November 2021
(a) State the meaning of each of the following words and phrase as used in the passage:
(i) upgrade;
(ii) notable;
(iii) led to;
(iv) favourites;
(v) hindering.
(b) In about 150 words, and according to the passage, write a summary on the various developments in the real estate sector.
c) Highlight, according to the passage, factors that have seen the growth of the real estate.
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