An assesment of the viability of real estate securitization in Kenya
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Date
2006Author
Muchiri, Stephen Kariuki
Type
ThesisLanguage
enMetadata
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This research examines the attitudes of Kenyans towards real estate securitization. To a large
extent the respondents' answers as to why there were no listed property companies seemed to
mirror the findings of Kimura and Amoro (1996). Most felt that the stock exchange was not well
understood by investors and particularly by entrepreneurs. Other reasons included the need for
confidentiality largely so they did not have to pay all their taxes and the feeling that the stock
exchange could understate their wealth for no concrete reason by having the shares of their
properties trade at below their net asset value.
Overwhelmingly professionals and ordinary investors said they would be ready to put their
money in securitized real estate. However the readiness to invest in shares of property companies
went down as the amount involved went up. Compared to owning a property most of the
respondents favoured owning a rental house to shares in a property company.
Individuals who controlled entities which own property were however hesitant to bring to the
market their property holdings. A most interesting finding among collectively owned property
organization officials is an extreme risk aversion. To a large extent, officials of property owning
organization feel that an attempt to divest part of their holding to the public would be viewed as
an attempt to benefit themselves by the other members, thi:..majority of whom did not understand
the basics of investments. Any innovative actions on the part of these officials is always viewed
with suspicion by the members. Even with the best intentions, any action not well understood by
members results in accusations of corruption.
Citation
A Management Research Project Report Submitted in Partial Fulfillment for the Requirements of the Degree of Masters of Business Administration (MBA), School Of Business, University Of NairobiPublisher
Business Administration