Real estate in Kenya

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The real estate sector in Kenya has seen a boom that begun somewhere in the mid to late 2000's because the property market is responding to demand that has been created by the expanding middle class with disposable income and in which people have become able to service their mortgages.

In Nairobi, the capital and largest city of Kenya, there is one of the largest expatriate communities in the continent due to the significant number of multinationals who have chosen Nairobi as either their African hub or East and Central African hub.[1]

Kenyan cities[edit]

Nairobi's profile as a regional business hub has been growing as seen by the number multinationals, from diverse industries, which have chosen to open shop in the Kenyan capital or decided to choose the city as their base for Africa-wide operations.

In 2012, Nairobi and Mombasa were the only cities in the "southern hemisphere" to have reported double digit property price increases, out of 71 cities surveyed in the Prime International Residential Index.[2] The table shows property price growth in the top cities in the survey.

Kenya
City Country Percentage increase between 2011 and 2012 (%)
Nairobi  Kenya 25
Mombasa  Kenya 20
Miami  USA 19.1
Bali  Indonesia 15
Jakarta  Indonesia 14.3
London  United Kingdom 12.1
Vancouver  Canada 10.4
Moscow  Russia 9.8
Toronto  Canada 8.5
Beijing  China 8.1

Source: BusinessDaily

The report noted that inflows from Kenyans in the diaspora are particularly significant in driving the prices and that buying a square metre of land in Nairobi and Mombasa is still cheaper than other cities such as Monaco.

Markets[edit]

Office[edit]

The office market in Kenya has moved from a position of oversupply and the market is finally stabilising, as Nairobi reinforces its position as the regional commercial hub of Sub-Saharan Africa.[3]

Retail[edit]

Kenya continues to experience some of the most decentralised growth of the retail market as marketers move outside Nairobi and go to other urban centres in Kenya such as Mombasa, Kisumu, Eldoret and Nakuru.

Industrial[edit]

Most industrial companies in Kenya tend to avoid renting or leasing space. However, over the recent years there has been significant development especially along Mombasa Rd. Rent and take up is low so the sector might need a couple more years to mature.

Residential[edit]

The residential market has actually been one of the key drivers of the property market. There has been a significant number of development projects coming up both within the Greater Nairobi Area and other urban areas such as Mombasa, Naivasha and Kisumu.

Prime Global Cities Index[edit]

Q1 2013[edit]

Kenya
Africa
No. City Country World region 12-month (Mar 2012–13) % change 6-month (Sep 2012 – Mar 13) % change 3-month (Dec 2012 – Mar 13) % change Data if not Q1
1 Jakarta Indonesia Asia Pacific 38.1 14.8 6.9 Q4
2 Bangkok Thailand Asia Pacific 26.1 7.1 5
3 Miami USA North America 21.1 5.8 −0.6
4 Dubai UAE Middle East 18.3 10.9 5.4
5 Shanghai China Asia Pacific 17.4 13.1 2.5
6 St Petersburg Russia Europe 13.1 11.9 1.8
7 Los Angeles USA North America 12.5 8.6 9.4 Q4
8 Monaco Monaco Europe 12.2 12.2 10
9 Hong Kong China
Hong Kong
Asia Pacific 8.8 2.6 1.2
10 Nairobi Kenya Africa 8.4 3.1 1.6
11 San Francisco USA North America 8.4 2.3 −0.1 Q4
12 London United Kingdom Europe 8.1 3.6 2.2
13 Beijing China Asia Pacific 6.3 4.9 2.7
14 Tel Aviv Israel Middle East 3.7 −4.1 −5.4 Q4
15 Kuala Lumpur Malaysia Asia Pacific 2.8 3.2 2.3
16 Cape Town South Africa Africa 1.7 1.7 1.2
17 Mumbai India Asia Pacific 1 0.7 0.5
18 Sydney Australia Asia Pacific 0 0.8 0.8 Q4
19 Moscow Russia Europe −1.8 1.1 1.6
20 Zurich Switzerland Europe −2.5 −2.5 0

[4]

Performance of luxury homes by world region[edit]

Q1 2013 Knight Frank Residential Research
Region Performance of luxury homes
Middle East
11
N. America
8.3
Asia Pacific
7.8
Africa
4.3
Europe
-2.5

Source: KnightFrank

Greater Nairobi and Nairobi Metro[edit]

Nairobi Metro within Kenya

Greater Nairobi consists of 4 out of 47 counties in Kenya but the area generates about 60% of the nation's wealth.[5][6] The counties are:

Area County Area (km²) Population
Census 2009
Cities/towns/municipalities in the counties
Core Nairobi Nairobi County 694.9 3,138,369 Nairobi
Northern Metro Kiambu County 2,449.2 1,623,282 Kiambu, Thika, Limuru, Ruiru, Karuri, Kikuyu
Southern Metro Kajiado County 21,292.7 687,312 Kajiado, Olkejuado, Bissil, Ngong, Kitengela, Kiserian, Ongata Rongai
Eastern Metro Machakos County 5,952.9 1,098,584 Kangundo-Tala, Machakos, Athi River
Totals Nairobi Metro 30,389.7 6,547,547

Nairobi (core)[edit]

Population of Core Nairobi between 1906 and 2009

Upper Hill[edit]

Upper Hill has become an alternative for major companies seeking land cheaper than that which is in the Central Business District of Nairobi. It is one of the two main bases multinational firms consider when setting up in Kenya or Africa. Some of the firms include but are not limited to: Cisco Systems, Citibank, Coca Cola, Huawei and IMF.

Average annual office rents for Grade A offices in Nairobi

Upper Hill
Westlands
Nairobi CBD

Source: KnightFrank

Westlands[edit]

Westlands along with Upper Hill has become one of the two main bases for multinational firms that want to set up in Kenya or Africa. Some of the firms include but are not limited to: General Electric, Google Africa headquarters, Intel Corporation, LG and Standard Chartered Plc.

Gigiri[edit]

Gigiri is home to Kenya's large expatriate community. It is one of the largest expat communities in Africa. It houses the United Nations Environmental Programme. Nairobi is the only African city to host a major UN body. It also has the Village Market, which targets the expat community in Nairobi and hosts the International Civil Aviation Organization Base for Eastern and Southern Africa. Gigiri is considered one of Kenya's most posh suburbs along with Runda and Muthaiga which are really close to the place.[7]

It is comparable to the mostly-expat-inhabited neighbourhood of Itaewon in South Korea. However, it is much smaller.

Runda, Muthaiga, Lavington, Karen[edit]

These areas are Kenya's most expensive neighbourhoods; however, it is very likely that the neighbourhoods like Runda will lose its tag due to the recent demolitions[8] and others are seeing more and more townhouses rather than mansions and villas.[9]

Machakos (East Metro)[edit]

Nairobi Metro Map
Nairobi County (red)
Kajiado County (green)
Machakos County (yellow)
Kiambu County (purple)

Towns in Machakos County on the outskirts of Nairobi from the 2000s been inhabited by people who work in Nairobi. Athi River is one town that has seen people move there. This shows that people have started to prefer living outside the core of the city. Under the Nairobi 2030 Masterplan, Machakos County is to become a dormitory town for Core Nairobi.[10][11]

Konza Techno City[edit]

Konza Technology City dubbed "Africa’s Silicon Valley" will be the single largest property development ever done in Kenya. It is going to host the technology city as part of many programmes that aim to steer Kenya into middle income status. It will cost a whooping US$ 14.5 billion after commencing in January 2013 and is to be completed by 2030.[12]

Kiambu (North Metro)[edit]

With the recent completion of the expansion of a road connecting Core Nairobi to Kiambu County, there has been a lot of property development happening with the most significant being:

Tatu City[edit]

Tatu City is a property development by Moscow-based Renaissance Partners. The development will cost US$ 2.5 billion; groundbreaking commenced in early 2013.[13]

Kajiado (South Metro)[edit]

Kajiado County is currently home to Kenya's richest people.[14] There are many residential neighbourhoods that host people who work in Nairobi examples are Ngong, Kitengela, Kiserian and Ongata Rongai. Kitengela is close to Athi River which has also started rising as a popular residential area.

Mombasa[edit]

Mombasa is the second-largest city in Kenya. Prime land in Mombasa is up for grabs as a property boom like the one witnessed in the 1970s continues to push up home prices in the coastal town.[15]

Nyali[edit]

Nyali houses some of the most expensive homes in Kenya.

Mtwapa[edit]

Even though Mtwapa is not in Mombasa County but in Kilifi County, it is the home of many residents who work in Mombasa City.

English Point Marina[edit]

English Point Marina will be East and Central Africa's first floating pontoon marina. It will offer apartment living in the comfort, luxury and security of a hotel and will be managed by Pinewood Village Beach Resort. Units sold cost between KES. 36 and 150 million (US$ 410,000 – US$ 1.8 million).[16] Despite the high prices, the units are almost sold out.[when?]

The total cost of the project is about KES. 4.8 billion (US$ 60 million).[17]

As of March 2013 the project was 30% complete.[18] A complete virtual tour of the property has been created to give online users a feel of what to expect from the development.[19]

References[edit]

  1. ^ http://www.businessdailyafrica.com/Opinion-and-Analysis/Why-Kenyan-real-estate-sector-is-robust-/-/539548/1909974/-/vf6wfz/-/index.html
  2. ^ http://www.businessdailyafrica.com/Nairobi-tops-global-cities-in-property-prices-rally/-/539552/1376198/-/ixqtsbz/-/index.html
  3. ^ http://resources.knightfrank.com/GetResearchResource.ashx?versionid=1668&type=1
  4. ^ Source: Knight Frank Residential Research, Miller Samuel/Douglas Elliman, Ken Corporation Hong Kong & Kuala Lumpur
  5. ^ http://196.200.27.243:8080/xmlui/bitstream/handle/123456789/111/Nairobi.pdf?sequence=3
  6. ^ http://www.nairobimetro.go.ke/index.php?option=com_docman&task=doc_download&gid=43&Itemid=90.
  7. ^ http://www.hassconsult.co.ke/index.php/area-profile/area-profile/110-gigiri
  8. ^ http://www.standardmedia.co.ke/?articleID=2000084594&story_title=Kenya-anxiety-as-houses-in-runda-face-demolition
  9. ^ http://allafrica.com/stories/201111250015.html
  10. ^ http://www.nairobimetro.go.ke/index.php?option=com_docman&task=doc_download&gid=25&Itemid=57
  11. ^ http://www.gizmag.com/konza-silicon-savanna/26033/
  12. ^ http://techloy.com/2013/01/24/kenyas-president-launches-15-billion-konza-silicon-city-project/
  13. ^ http://www.planetizen.com/node/62952
  14. ^ http://www.nation.co.ke/News/politics/Kajiado-richest-county-Turkana-poorest-/-/1064/1930892/-/ain94qz/-/index.html
  15. ^ http://www.businessdailyafrica.com/Investors-cash-in-on-Mombasa-land-rush-as-property-prices-soar/-/539546/1225096/-/bdka4yz/-/index.html
  16. ^ http://www.denisonyachtsales.com/2011/06/kenyas-first-marina-hopes-to-attract-boats-yachts/
  17. ^ http://www.megaprojects.co.ke/projects/20/details/#.UgDtcWQY1jA
  18. ^ http://www.youtube.com/watch?v=TfEdbA-IezY
  19. ^ http://www.360tours.co.ke/tours/final/epm_tour

External links[edit]