The Big 5 Construct Kenya 2020 - Construction Market Report · HVAC-R Building materials & Tools...

Kenya ConstruCtion Market

February 20202019 – 2027

04 - 06 nOVeMBeR 2020k e n y a t t a i n t e r n a t i o n a L ConVention Centre, nairobi, kenya

in PartnersHiP WitH

table of contentssection 1: exeCutive suMMary

section 5: by tyPe

section 3: by ProduCt seCtors

section 7: by seCtor

section 2: Market overvieW

section 6: General ConstruCtion

section 4: by buildinG serviCes

section 8: key takeaWays

Kenya ConstruCtion Market

kenya ConstruCtion Market

exeCutive suMMary

section 01

©2018 Transparency Market Research, All Rights Reserved


Plant Machinery & Vehicles

HVAC-R

Building materials & Tools

2018CAGR (2019 – 2027)

6.7%

6.6%

6.9%

CAGR 6.8%(In term of Value)

2019-2027

2017

2020

2024

2027

US$

3,610.0

Mn

US$

4,373.2

Mn

US$

5,677.6

Mn

US$

6,934.6

Mn

Construction MarketKenya Industry Analysis, Size, Share, Growth, Trends and Forecast, 2019 – 2027

Product Sector US$ 3,846.9 Mn

Kenya Construction MarketExecutive Summary (1/2)

Building Interiors 6.5%

By Building Service (Market Share)

Facilities Management 71.2%

Building Automation 21.3%

Software & IT 7.6%



“Kenya market is expected to grow at a CAGR of 6.8% to reach US$ 6,934.6 Mn by 2027”

By Type

Heavy & Civil Engineering 53.75%

General Construction 42.63%

Market Share (2018)

Kenya Construction MarketExecutive Summary (2/2)

Rural

30.59%

CAGR 6.1%

2019-2027

Urban

69.41%

CAGR 7.1%

2019-2027

US$

3,846.9

Mn

2018

By Sector (2018)

Others 3.62%

By General Construction

Residential 50.65%

Commercial 14.10%

Industrial 35.25%


Market overvieW

section 02

Economic growth will continue to support the expansion in construction

1

2

Kenya is investing heavily in the infrastructure development. Government has prioritized low cost housing to meet the rising demand and coverthe current and anticipated shortfall.

Kenya is also promoting development of Special Economic Zones (SEZs), Industrial Parks, Industrial Clusters, promotion of small and mediumscale manufacturing firms which will drive the construction market of Kenya in near future.

The Kenyan government is actively seeking bids to improve and expand infrastructure networks, domestically and across East Africa to improvetrade flows in the region such as construction of Lamu Port and South Sudan Ethiopia Transport project, development of commuter railwaysystem around Nairobi, design and construction of new terminal at Jomo Kenyatta International Airport, etc. which are the major infrastructuredevelopments undertaken by Kenyan government which is anticipated to drive the market of construction sector in Kenya.

Government Investment in Infrastructure

Kenya’s economy remains one of the strongest economies in Africa recording a GDP of Kshs. 8904.9 billion (US$ 86.93 billion) and growing at6.3% in 2018. Agriculture Sector is the mainstay of the economy. It is not only the driver of Kenya's economy but also the means of livelihood forthe majority of Kenyan people.

Kenya massive upgrading and extension of the country's infrastructure. In this regard the country has huge number of infrastructure projectswhich is expected to fuel the construction market in Kenya.

The country has particular advantages like a reasonably well-educated labor force, a vital port that serves as an entry point for goods destined forcountries in the East African and Central Africa interior, abundant wildlife and kilometers of attractive coastline and above all, a government thatis committed to implementing business reforms. These are the major factors which are positively affecting the economic development of thecountry which leads to the growth of construction sector in Kenya.

DRIVERS


High Competitive Industry & Unskilled Draughtsman

1

2

With a fast growing population, and increasing demand for affordable housing, opportunities exist in the construction of residential, commercialand industrial buildings.

As Kenya is facing 2 million housing deficit and the housing demand in the country has been growing at a rate of 200,000 units per annum.According to the statistics of National Housing Corporation, the country can supply only 50,000 units per annum. Thus, the huge demand ofresidential spaces will create better opportunities for construction sector in Kenya.

In addition, the rapid urbanization, increasing development of manufacturing facilities and country’s Vision 2030 Strategy will bring out manyexcellent opportunities to the construction companies and overall construction industry in Kenya.

Rising demand for commercial and residential buildings

RESTRAINTS

OPPORTUNITY

Due to boom in construction industry, the prices of raw materials such as cement and concrete have been increasing in recent years.

The construction industry has been facing a lot of challenges in quality assurance from collapsing of buildings and poorly made roads which donot last. Kenya has challenges with unskilled draughtsman which can affect the construction market in Kenya.

The improper working standards of construction project has sometimes led to cases of collapsed buildings in various parts of the countryespecially in Nairobi where the collapse of low cost residential flats has resulted in the loss of properties and lives.




• Rapidly growing population is increasing

the demand for residential units

• Government initiatives and policies for

housing sector.

• Government investment in infrastructure

development

• Use of sustainable technology for

reducing cost

• Mergers with major players to execute

projects

• Development in rural areas

• Changing political conditions

• Fluctuating prices of raw materials

• Social and natural constrains hampers

the entire execution plan

• High cost of capital investment and new

equipment's with advanced technology

are expensive

• Scarcity of skilled labors

S

O T

W

SWOT ANALYSIS



Threat of NewEntrants

Treat of new entrants is low to medium To operate in construction market high

initial investment is essential. A large workforce is required which is

capable of carrying out smoothoperation.

A good brand image of constructioncompany is required.

Bargaining Powerof Suppliers

The bargaining power of suppliers islow to medium due to the presence ofmany suppliers.

The innovation of new materials andequipment's leads to severecompetition and suppliers has limitedcontrol over bargaining power.

Threat of Substitute Threat of substitute is low. There is no substitute to construction

market.

The construction companies have

high rivalry due to numerous

government construction

projects

Bargaining Powerof Buyers

Bargaining power of buyers is medium tohigh due to the presence of many players.

Highly price sensitive market. Buyers caneasily change their purchasing decisionson the basis of affordability of price.

Buyers look for modern technology andfacilities.

PORTER’S FIVE FORCES ANALYSIS



S

O

KEY TREND ANALYSIS

The construction industry includes activities of developing and constructing residential and non residential buildings, civil engineering construction and

specialist construction. Construction industry has a direct impact on global economy and on other related sectors. The Kenya Government is taking major

steps for the development of transport facilities which can improve the trade in the country which will indirectly affect positively for Kenya Construction

Market. Furthermore, The housing deficit in Kenya stood at 2 million in 2012 and continues to grow at the rate of over 200,000 units a year. There is a

proliferation of informal settlements in urban areas with 60% of the population living in informal settlements. Thus, Kenyan Government is focusing on low

cost and affordable construction of housing units.

Manufacturers are increasingly focusing on offering innovative low cost construction projects in Kenya to meet the housing deficit. Some construction

companies are building the residential units by using advanced technologies. For example, Epco Builders Limited, one of the leading construction company in

Kenya is using the Wall Ties & Forms rapid concrete formwork technology. The company provided 15 low-cost homes for Ministry of Housing employees.

Epco used the Wall Ties & Forms post-and-beam system that delivers superstructures faster than conventional concrete forming systems. Many companies

are also forming partnership with investment companies to complete the construction projects in the country. Furthermore, there are also some foreign

investment companies especially from China which are providing financial support for the betterment of construction activities in Kenya.

Supply Side

Demand Side



Green Building Scenario in Kenya

Green Building Industry Overview

• A green building is one that is energy and resource efficient, as well as environmentally

responsible. It enables the investor save on time and cost, and at the same time creating a

more comfortable, more productive and healthier environment to live and work in. A green

building is a big step forward in addressing climate change. The Green Africa Foundation and

Government of Kenya has produced GreenMark Standard. GreenMark is a Standard for use

in rating and certifying green buildings in Kenya and the Africa region.

• The Kenya Green Buildings Society is raising awareness on the benefits of green buildings

and supports the government to lead by example, as well as legislate and facilitate the

adoption of green building practices. It also recognizes and awards industry leaders who

excel in green building.

• Along with the adoption of green building the demand for affordable housing will remain

strong in Kenya.

5.5

0.5

2.6

0.4

TOTAL M AR K ET G R EEN B UIL DING M AR K ET

Building Market Of Kenya (US$ Bn )

Residential Commercial

KEY MARKET INDICATORS

Construction Equipment/Vehicle Industry Overview

Construction Equipment/Vehicle Scenario in Kenya

• Kenya is one of the fastest growing economies in the East African region and has witnessed a

rapid rise in infrastructure development.

• Expenditure on infrastructure projects by the Kenyan government has been on an upward

trend in line with the country's development blueprint, the Vision 2030 identifies infrastructure

development and the bolstering of the mining industry as key economic pillars. The country's

economic growth has also resulted in an expanding middle class therefore increasing the

demand for commercial and residential properties. The first figure shows the total number of

units consumed in Kenya for the construction purpose. Approximately 830 units were

consumed in the year 2015.

• The second figure shows 53% of contractors use leased equipment, 27% Owned, 18%

combined lease and owned and 2% use hired equipment in Kenya.

830

2015

C onstruct i on & Mi n i ng Equi pme nt i n Ke ny a ( N umbe r of

U ni ts C onsume d)

Construction Equipment Market

53%

27%

18%2%

Equipment Source Model in Kenya

Leased Owned Both Hired

Figure :1 Figure :2



Policies and Schemes: Description

Contractors operating or willing to undertake construction operations in Kenya are required by law to register through the NCA. NCAis mandated to clear Kenya builders and contractors as a way of eliminating rogue contractors and malpractices in building andconstruction.

The National Construction Authority Act No. 41 of 2011

Environment Management andCoordination Act(Amendment) of 2015

The Act provides for environmental protection through”• Environmental impact assessment• Environmental audit and monitoring• Environmental restoration orders, conservation orders, and easements

Kenya Engineering Technology Registration Board (KETRB)

Engineering Technology Act No 23 of 2016This act set standards for engineering technologists and technicians, register and issue licenses to qualified persons as per theprovision of the Act.

The Society OfConstruction LawKenya

Kenya Roads Act 2017This Act of Parliament is to provide for the establishment of the Kenya National Highways Authority, the Kenya Urban RoadsAuthority and the Kenya Rural Roads Authority, to provide for the powers and functions of the authorities and for connectedpurposes

POLICIES & SCHEMES



PESTEL Analysis

PESTELAnalysis

Political

Legal

Economic

Environmental

Social

Technological

Lack of accountability for serious human rights violations,

perpetrated largely by security forces, remains a major

concern in Kenya.

Climate variability has led to significant economic losses

and food insecurity. Other factors such as wildlife crime,

urban expansion, and rapid population growth are

threatening conservation efforts.

Kenya’s GDP was estimated at $78.4 billion in 2016 and

growth at 5.7%, 5.8% and 5% in 2015, 2016 and 2017,

respectively. Agriculture is the largest employer,

accounting for 75% of the workforce.

Kenya has a population of 48 million, growing at 1.69%

annually. The population is very young, with an average

age of 19.7 years, and 26.5% living in urban areas.

Kenya’s literacy rate is about 78%.

• Kenya - Hub of ICT innovation in Africa

• Advancement in the ICT sector - mobile money transfer ,

fiber optic

• Emergence of cyber crime

The fundamental laws of Kenya are similar to those found

in most European countries. Competition law in Kenya is

maintained and upheld by the Competition Authority of

Kenya, established under the Competition Act of 2012.



Technology and Research & Development

Below are some technologies which can be employed by construction sector for Affordable Housing Projects in Kenya

3D Printing

Full scale 3D house printing technology is a construction method that uses a large 3-D printer-scaffolds to build the walls of a structure. It can be used to build

on-site or to produce pre-fabricated components remotely. The 3-D printer “ink” is typically a cement-based mixture that can include additives to improve

strength or reduce cost. Mixtures can include building demolition rubble, proprietary additives to the cement base, fiberglass, or special glue mixes. The

technology can be implemented in rural and urban areas, though is most easily applied in flatlands. While 3-D printing systems may require only a small

workforce at the time of printing, a highly qualified operator is needed and skilled craftsmen are needed for follow up installation of architectural elements.

COMPRESSED STABILIZED EARTH BLOCKS (CSEB)

Compressed Stabilized Earth Blocks (CSEBs) are made by mechanically compressing inorganic soil mixed with a small portion of Portland cement (5-10%) into a

brick. Walls of CSEB are built using standard bricklaying and masonry techniques including the use of clay or cement mortar. CSEBs require substantially less

energy to fabricate than conventionally fired bricks. This technology is more suited for rural areas where large amounts of inorganic soil are present. A small

team of masons can be quickly trained to mix material and fabricate the bricks, though a qualified foreman is needed to ensure quality control.

INTERLOCKING SOIL STABILIZED BLOCKS (ISSB)

Interlocking Stabilized Soil Blocks (ISSBs) are a specific type of Compressed Stabilized Earth Block (CSEB) technology. While ISSBs are made from the same

soil/cement ratio of 1:10 as CSEBs, ISSBs present an interlocking form that allows for strong, rapidly assembled systems that do not need cement mortar. This

technology is more suited for rural areas where large amounts of inorganic soil are present.

COMPRESSED AGRICULTURAL FIBER (CAF)

Compressed Agricultural Fiber (CAF) panels are insulated panels made of agriculture waste such as wheat and rice straw. The agro-waste is compressed at a

high temperature and sealed with a final layer of cardboard. Prefabricated offsite, the panels are light weight and easily transported to a construction site.

While the panels can be self-supporting, the system is best paired with a steel or wood frame structure as a primary structural system.



3,6

10.0

3,8

46.9

4,1

00.

8

4,3

73.

2

4,6

65

.3

4,9

79.0

5,3

15.8

5,6

77

.6

6,0

66

.5

6,4

84

.7

6,9

34

.6

2017H 2018A 2019E 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027F

Kenya Construction Market Value(US$ Mn) Analysis and Forecast, 2017 - 2027

CAGR 2019-27 (6.8%)

MARKET OUTLOOK


by ProduCt seCtors

section 03



Kenya Construction Market Value Size & Forecast, by Product Sector, US$ Mn, 2017-2027

Product Sector 2017H

2018A

2019 E

2020F

2021F

2022F

2023F

2024F

2025F

2026F

2027F

CAGR(2019–2027)

Plant Machinery & Vehicles 768.6 818.3 871.6 928.6 989.8 1,055.5 1,126.0 1,201.6 1,282.9 1,370.3 1,464.3 6.7%

Formwork & Scaffolding 93.7 99.1 104.8 110.9 117.4 124.3 131.6 139.4 147.7 156.6 166.0 5.9%

Concrete and Cement Equipment 185.8 196.9 208.7 221.2 234.6 248.8 264.0 280.2 297.5 316.0 335.7 6.1%

Construction & Commercial Vehicles 216.7 229.7 243.5 258.3 274.0 290.8 308.7 327.8 348.2 370.0 393.3 6.2%

Batching Equipment 118.2 124.9 132.0 139.5 147.5 156.0 165.1 174.7 185.0 195.9 207.5 5.8%

Mining Machinery & Equipment 154.2 163.2 172.8 183.0 193.9 205.5 217.8 231.0 245.0 260.0 276.0 6.0%

HVAC - R 590.2 627.8 668.0 711.0 757.0 806.3 859.0 915.6 976.1 1,041.1 1,110.8 6.6%

Heating Ventilation & Air Conditioning 144.1 152.3 161.1 170.4 180.2 190.7 201.9 213.8 226.4 239.9 254.3 5.9%

Refrigeration system & Equipment 40.0 42.3 44.8 47.4 50.2 53.2 56.4 59.7 63.3 67.2 71.3 6.0%

Plumbing and water technology 145.1 153.7 163.0 172.8 183.3 194.5 206.4 219.2 232.8 247.3 262.8 6.2%

Pumps, Valves, Pipes & Fittings 154.7 163.8 173.5 183.8 194.8 206.5 218.9 232.2 246.4 261.5 277.7 6.1%

Access and Lifting Equipment 106.3 112.3 118.7 125.5 132.7 140.3 148.4 157.1 166.3 176.1 186.6 5.8%

Construction MarketKenya Value Projection



Kenya Construction Market Value Size & Forecast, by Product Sector, US$ Mn, 2017-2027

Product Sector 2017H

2018A

2019 E

2020F

2021F

2022F

2023F

2024F

2025F

2026F

2027F

CAGR(2019–2027)

Building Materials & Tools 2,100.3 2,240.4 2,390.7 2,552.1 2,725.5 2,911.8 3,112.1 3,327.5 3,559.3 3,808.9 4,077.7 6.9%

Construction Tools and Hardware 760.1 805.7 854.3 906.1 961.3 1,020.2 1,083.0 1,150.2 1,221.8 1,298.5 1,380.4 6.2%

Materials 1,340.2 1,418.1 1,500.9 1,588.9 1,682.7 1,782.4 1,888.6 2,001.6 2,122.0 2,250.3 2,387.1 6.0%

Wood, Plastic & Composite 196.4 208.1 220.6 233.9 248.0 263.2 279.3 296.5 315.0 334.6 355.7 6.2%

Aluminum 89.3 94.3 99.7 105.4 111.4 117.8 124.7 131.9 139.7 147.9 156.7 5.8%

Metal & Steel 482.0 510.4 540.6 572.7 606.9 643.4 682.2 723.7 767.9 815.1 865.5 6.1%

Cement & Concrete 551.3 583.3 617.3 653.5 692.0 733.0 776.7 823.3 872.9 925.9 982.3 6.0%

Others 21.1 22.3 23.6 25.0 26.4 28.0 29.6 31.4 33.3 35.3 37.4 5.9%

Building Interiors 150.9 160.4 170.5 181.4 193.0 205.4 218.6 232.9 248.1 264.4 281.9 6.5%

Marble, Ceramic & Stone 31.2 33.0 34.9 36.9 39.0 41.3 43.8 46.4 49.1 52.0 55.2 5.9%

Kitchen, Bathroom & Related Surfaces 8.3 8.7 9.2 9.7 10.3 10.8 11.5 12.1 12.8 13.6 14.4 5.7%

Surface & Finishes 11.8 12.5 13.2 14.0 14.8 15.7 16.7 17.7 18.8 19.9 21.1 6.0%

Lighting 5.3 5.6 5.9 6.2 6.6 7.0 7.4 7.8 8.2 8.7 9.2 5.8%

Sealants, Adhesives & Coatings 8.0 8.5 8.9 9.5 10.0 10.6 11.2 11.9 12.6 13.4 14.2 5.9%

Flooring, Sealing & Walling 51.2 54.3 57.6 61.1 64.9 68.9 73.2 77.9 82.8 88.1 93.7 6.3%

Windows & Doors 35.2 37.3 39.5 41.9 44.4 47.1 50.0 53.1 56.3 59.8 63.6 6.1%

Total 3,610.0 3,846.9 4,100.8 4,373.2 4,665.3 4,979.0 5,315.8 5,677.6 6,066.5 6,484.7 6,934.6 6.8%




Kenya Construction Market, Incremental Opportunity, by Product Sector, US$ Mn

INSIGHTS

In Kenya, Building materials and Tools dominates the product sector segment. The construction sector is expected to have a steady growth during the forecast period. Economic recoveryin 2017, political stability and favorable macroeconomic indicators are like to be conducive for growth during the forecast period. Kenyan government has increased its investment ininfrastructure due to which various infrastructure projects are to be undertaken in different parts of the country.

Kenya in 2019 became an oil exporter, the government will now ensure that those resources are used for making country prosperous and poverty free. Investment in infrastructure,growth in private consumption and improved business confidence are the major building materials & tools market is growing in Kenya.


CA

GR

(20

19-2

02

7.

%)

Low

Med

ium

Hig

h

Low HighMedium

Plant Machinery and Vehicles,

592.7

HVAC - R, 442.8

Building Materials and Tools, 1,687.0

Building Interiors, 100.5

Kenya Construction Market Projections by Product Sector, US$ Mn, 2017-2027

6.8% CAGR

3,610.03,846.9

4,100.84,373.2

4,665.34,979.0

5,315.85,677.6

6,066.56,484.7 6,934.6

2017H 2018A 2019E 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027F

Plant Machinery & Vehicles HVAC - R Building Materials & Tools Building Interiors


by buildinG serviCes

section 04



Kenya Construction Market Value Size & Forecast, by Building Service, US$ Mn, 2017-2027

Building Service 2017H

2018A

2019 E

2020F

2021F

2022F

2023F

2024F

2025F

2026F

2027F

CAGR(2019–2027)

Facilities Management 2,570.0 2,737.9 2,917.8 3,110.8 3,317.7 3,539.8 3,778.2 4,034.3 4,309.5 4,605.4 4,923.6 6.8%

Commercial Cleaning & Hygiene 1,367.0 1,459.0 1,557.8 1,663.9 1,778.0 1,900.5 2,032.3 2,174.1 2,326.7 2,491.0 2,668.1 7.0%

Elevators & Escalators Maintenance 401.4 424.3 448.7 474.6 502.2 531.5 562.7 596.0 631.4 669.2 709.5 5.9%

Safety & Security 801.6 854.5 911.3 972.2 1,037.6 1,107.8 1,183.2 1,264.2 1,351.4 1,445.1 1,546.0 6.8%

Building Automation 765.0 817.9 874.8 936.0 1,001.8 1,072.7 1,149.1 1,231.3 1,319.9 1,415.5 1,518.7 7.1%

Software & IT 275.1 291.1 308.2 326.4 345.8 366.5 388.5 412.0 437.0 463.8 492.4 6.0%

Total 3,610.0 3,846.9 4,100.8 4,373.2 4,665.3 4,979.0 5,315.8 5,677.6 6,066.5 6,484.7 6,934.6 6.8%




Kenya Construction Market, Incremental Opportunity, by Building Service, US$ Mn


3,610.0 3,846.9 4,100.84,373.2

4,665.34,979.0

5,315.85,677.6

6,066.56,484.7

6,934.6

2017H 2018A 2019E 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027FFacilities Management Building Automation Software & IT

Kenya Construction Market Projections by Building Service, US$ Mn, 2017-2027

6.8% CAGR

INSIGHTS

Facility management dominates the building service segment. Facility management comprises of cleaning & hygiene, safety & security services and escalators & elevators maintenanceactivities. Accidents and injuries are most common during construction activities and ensuring safety of workers & residents is the top priority. Safety can be maintained by keeping theconstruction areas clean from debris & other hazardous substances.

The goal of Kenyan government is to increase construction sector contribution to GDP by at least 10%. There are 43 ongoing mega infrastructure projects in East Africa. The Kenya“Vision 2030” development plan aims in transforming Kenya to middle income industrialized country with high quality of life in safe and clean environment. This initiative will furtherdrive the demand for various building services during the forecast period.

CA

GR

(20

19-2

02

7.

%)

Low

Med

ium

Hig

h

Low HighMedium

Facilities Management,

2,005.8Building Automation, 643.9

Software & IT, 184.1


by tyPe

section 05



Kenya Construction Market Value Size & Forecast, by Type, US$ Mn, 2017-2027

Type 2017H

2018A

2019 E

2020F

2021F

2022F

2023F

2024F

2025F

2026F

2027F

CAGR(2019–2027)

Heavy and Civil Engineering 1941.5 2,067.6 2,202.7 2,347.6 2,502.9 2,669.5 2,848.3 3,040.3 3,246.5 3,468.2 3,706.6 6.7%

Bridge 205.0 217.6 231.0 245.4 260.7 277.1 294.6 313.4 333.5 355.0 378.1 6.4%

Road 705.5 753.4 804.9 860.1 919.5 983.4 1,052.2 1,126.1 1,205.8 1,291.6 1,384.0 7.0%

Railways 552.3 588.1 626.5 667.5 711.6 758.8 809.5 863.9 922.3 985.1 1,052.7 6.7%

Airports 325.8 347.6 371.0 396.2 423.2 452.2 483.4 517.0 553.1 592.0 633.8 6.9%

Others (Sewage, Under Bridges, etc.) 152.8 160.8 169.3 178.3 187.9 197.9 208.6 219.9 231.9 244.5 258.0 5.4%

General Construction 1536.42 1,639.9 1,751.0 1,870.3 1,998.4 2136.23 2,284.4 2,443.8 2,615.4 2,800.1 2,999.2 7.0%

Others (Specialty Trades, Maintenance, etc.)

132.13 139.4 147.1 155.3 164.0 173.3 183.1 193.5 204.6 216.3 228.8 5.7%

Total 3,610.0 3,846.9 4,100.8 4,373.2 4,665.3 4,979.0 5,315.8 5,677.6 6,066.5 6,484.7 6,934.6 6.8%




Kenya Construction Market, Incremental Opportunity, by Type, US$ Mn

INSIGHTS

The governments expenditure on construction, repair and maintenance of roads is expected to increase during the forecast period. The funds provided by Kenya Roads Board to variousagencies will also support in construction of roads in Kenya.

In order to improve Nairobi commuter rail services system construction of various commuter stations was initiated in 2017. The number of passengers handled by airports in 2017increased as compared to 2016. This has led to expansion of Jomo Kenyatta International Airport.

Heavy & Civil Engineering segment dominates the market and will continue its dominance throughout the forecast period due to increase in public private partnership and concessionalfinancing by the government.


3,610.1 3,846.9 4,100.84,373.2

4,665.34,979.0

5,315.85,677.6

6,066.56,484.6

6,934.6

2017H 2018A 2019E 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027F

Heavy & Civil Engineering General Construction Others

Kenya Construction Market Projections by Type, US$ Mn, 2017-2027

6.8% CAGR

CA

GR

(20

19-2

02

7.

%)

Low

Med

ium

Hig

h

Low HighMedium

Heavy & Civil Engineering,

1,503.8

General Construction, 1,248.3

Others , 81.7


General ConstruCtion

section 06



Kenya Construction Market Value Size & Forecast, by General Construction, US$ Mn, 2017-2027

General Construction 2017H

2018A

2019 E

2020F

2021F

2022F

2023F

2024F

2025F

2026F

2027F

CAGR(2019–2027)

Residential 778.5 830.7 886.6 946.7 1,011.2 1,080.6 1,155.2 1,235.4 1,321.7 1,414.6 1,514.6 6.9%

Houses 180.38 192.49 205.48 219.44 234.43 250.54 267.86 286.49 306.54 328.13 351.39 6.9%

Apartments 515.13 550.83 589.21 630.50 674.93 722.8 774.29 829.80 889.66 954.21 1023.88 7.2%

Others (Villas, hostels, etc.) 82.99 87.3 91.9 96.8 101.9 107.3 113.0 119.1 125.5 132.2 139.3 5.3%

Commercial 217.2 231.2 246.0 262.0 279.1 297.4 317.0 338.0 360.6 384.9 410.9 6.6%

Hotels 22.1 23.5 25.0 26.6 28.3 30.2 32.1 34.2 36.5 38.9 41.5 6.5%

Offices 53.4 56.9 60.7 64.7 69.0 73.6 78.5 83.8 89.5 95.7 102.3 6.7%

Hospitals 37.5 40.0 42.7 45.5 48.6 51.8 55.3 59.1 63.2 67.5 72.2 6.8%

Malls/Multiplexes 42.1 44.8 47.7 50.8 54.2 57.7 61.6 65.7 70.1 74.8 79.9 6.6%

Education Institutes 35.2 37.5 40.0 42.7 45.6 48.7 52.0 55.6 59.5 63.7 68.1 6.9%

Others (Shops, parks, etc.) 26.9 28.4 30.0 31.7 33.5 35.4 37.4 39.6 41.8 44.3 46.9 5.7%

Industrial 540.7 578.1 618.3 661.6 708.1 758.3 812.2 870.4 933.1 1,000.7 1,073.7 7.1%

Chemical & Pharmaceutical 109.2 116.9 125.3 134.2 143.9 154.4 165.6 177.8 190.9 205.1 220.4 7.3%

Metal & Material Processing

82.1 87.5 93.3 99.5 106.2 113.3 121.0 129.2 138.1 147.6 157.8 6.8%

Paint 55.1 58.8 62.7 66.9 71.5 76.4 81.6 87.2 93.3 99.8 106.8 6.9%

Glass 38.9 41.5 44.3 47.3 50.5 54.0 57.7 61.7 66.0 70.7 75.7 6.9%

Textile 88.1 94.1 100.7 107.7 115.2 123.4 132.1 141.5 151.7 162.7 174.5 7.1%

Oil & Gas 61.6 66.0 70.8 76.0 81.5 87.5 94.0 101.0 108.6 116.8 125.6 7.4%

Others (Marine, Power, etc.) 105.8 113.2 121.3 129.9 139.2 149.3 160.1 171.8 184.5 198.1 212.8 7.3%

Total 1536.4 1639.9 1751.0 1870.3 1998.4 2136.2 2284.4 2443.8 2615.4 2800.1 2999.2 7.0%




Kenya Construction Market, Incremental Opportunity, by General Construction, US$ Mn

INSIGHTS

Residential segment will dominate throughout the forecast period. However, Industrial sector will grow at a higher CAGR. Import of vehicles is high and Kenya is expected to have fivemillion vehicles on road by 2030. Automotive industry in Kenya is expected to increase during the forecast period. Kenya has witnesses an steadily increasing middle class which hasresulted in demand for housing in urban areas. Demand for low cost housing is high in the country. To meet the demand of increasing population, apartments and houses are built byvarious companies.

In order to support the growth of knowledge economy, the Kenyan government is encouraging the construction & development of industrial and technological parks. Green constructionis also becoming popular in the country. Hence, due to increasing demand the general construction market is expected to grow at a rapid rate during the forecast period.


1,536.41,639.9

1,751.01,870.3

1,998.42,136.2

2,284.42,443.8

2,615.42,800.1

2,999.2

2017H 2018A 2019E 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027F

Residential Commercial Industrial

Kenya Construction Market Projections by General Construction, US$ Mn, 2017-2027

7.0% CAGR

CA

GR

(20

19-2

02

7.

%)

Low

Med

ium

Hig

h

Low HighMedium

Residential, 628.0

Commercial, 164.8

Industrial, 455.4


by seCtor

section 07



3,610.0 3,846.9 4,100.8 4,373.2 4,665.3 4,979.05,315.8

5,677.66,066.5

6,484.76,934.6

2017H 2018A 2019E 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027F

Urban Rural

Kenya Construction Market Projections by Sector, US$ Mn, 2017-2027

6.8% CAGR

Kenya Construction Market Value Size & Forecast, by Sector, US$ Mn, 2017-2027

Sector 2017H

2018A

2019 E

2020F

2021F

2022F

2023F

2024F

2025F

2026F

2027F

CAGR(2019–2027)

Urban 2,498.5 2,670.1 2,854.4 3,052.6 3,265.8 3,495.2 3,742.2 4,008.1 4,294.7 4,603.6 4,936.8 2,498.5

Rural 1,111.5 1,176.8 1,246.4 1,320.5 1,399.5 1,483.7 1,573.6 1,669.4 1,771.8 1,881.1 1,997.9 1,111.5

Total 3,610.0 3,846.9 4,100.8 4,373.2 4,665.3 4,979.0 5,315.8 5,677.6 6,066.5 6,484.7 6,934.6 3,610.0




Kenya Construction Market, Incremental Opportunity, by Sector, US$ Mn

INSIGHTS

In 2017, it was estimated that 61% of urban population is living in slums. To overcome this scenario multiple development projects are initiated in urban areas of Kenya. The country

is under going an urbanization process, particularly in cities like Nairobi which promotes the development of tourism, hotels which in turn drive the demand for construction

market. The Kenyan government is focusing on the development of construction, manufacturing and agriculture industries.

Agriculture is the major driving force of Kenyan economy and boosting of agricultural sector will help in reducing poverty in rural areas. The government is trying to improve market

access and trade scenario for the development of various sectors. The bilateral trade between China and Kenya and Chinas BRI initiative will help Kenya to grow during the forecast

period.

CA

GR

(20

19-2

02

7.

%)

Low

Med

ium

Hig

h

Low HighMedium


Urban, 2,082.3Rural, 751.5


key takeaWays

section 08



By TypeIn Kenya, Heavy and civil engineering segment has a higher marketshare. Roads will dominate the segment due to various on going roadprojects. In general construction, residential segment will grow due tolow cost housing policy and increasing purchasing capacity of middleclass.

04

ANALYSIS

By SectorIn the Kenya market, urban segment dominates theconstruction market with a market share of around 69.41%in the year 2018. The government has bilateral trade withChina which will further boost the construction market inKenya.

03By Product Sector

Building Materials & Tools will dominate themarket during the forecast period. In spite ofsluggish cement market in 2018, the demand forcement is expected to grow in future.

By Building ServiceThe Kenyan construction industry is projected toexpand during the forecast period due toimplementation of Vision 2030 and various PPPprojects.

01

02

Kenya Construction MarketKey Takeaways

THE MEETING PLACE For kenya’s ConstruCtion industry

Ken

ya

Get in tOUcH tODay tO BOOK a Key lOcatiOneric chan event Manager

t: +971 4 445 3730e: [email protected]

claudia chidiac

sales executive

t: +971 4 4453703 e: [email protected]

Ratesspace only $380 per sqm

Furnished shell $430 per sqm

PMV $100 per sqm

www.tHeBiG5cOnstRUctKenya.cOM Organised by

04 - 06 nOVeMBeR 2020k e n y a t t a i n t e r n a t i o n a L ConVention Centre, nairobi, kenya

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