Nairobi Real Estate Beckoning Ambitious Investors

Posted by Grace Dervishi on September 20th, 2016

Phenomenal investments are taking place in Kenya’s real estate sector. Projects worth billions of shillings have been completed and many are in different stages of construction. The boom has encouraged international players in Kenya.

Among the top areas of investment are Nairobi’s satellite towns that include Kitengela, Juja, Kangundo Road, Kiserian and Athi River.

The driving factors of property investment are land availability and reasonable prices. This was endorsed by HassConsult’s land price index with investor interest showing up more in land plots in the above locations than putting money in stocks, bonds or treasury bills.

An example is a city investor who bought an acre of land in 2007 for one million shillings in these areas he is getting 7 million shillings in 2016. The same investment would have only got him a million shillings in the bond market for the same period.

In a recent interview, Francis Kihanya of Manyatta Investments International said that the majority of Diaspora investments are going to the satellite towns as they are the new sunrise areas in Nairobi’s real estate sector. He said the best returns are available in these satellite towns as land prices within the city boundaries are on the rise.

According to one expert, more than 60 percent of investments from the Diaspora on real estate are happening in satellite towns. Interestingly, most people are investing in land for the future and not for current construction needs.

A survey has said prices of office space in Nairobi will moderate as there is a glut in the supply. There is a heavy uptick of offices for sale in Westlands as MNCs have a special liking for the suburb thanks to the good infrastructure and central position within the city.

According to Britain Asset Management, 3.8 million square feet of office space will be added to the market by the end 2016 that is up from 1.7 million in 2015.

The report titled, Demystifying Nairobi's Office Market Space, said the increase in supply will be the fallout of speculative investors, who are upbeat about the economic outlook.

The report specifically mentions Westlands, Nong Road and Upper Hill as leading the supply brigade with Karen, Riverside, and Kilimani getting a demand that will neutralize the supply. Mombasa Road is, however, struggling.

For investors, the good news is that there are good property consulting agencies who are guiding investors in supporting the most lucrative projects at resorts, land, residential apartments and commercial and office property. Real estate investment in Nairobi is becoming a lucrative opportunity for seasoned investors thanks to these indigenous consultants.