With the Kenyan real estate market previously experiencing a slow surge, recent discoveries have shown a massive growth pattern in the industry. This is highlighted by the sector’s increased contribution to the nation’s GDP, which rose from 10.5% in 2000 to 12.6% in 2012 and 13.8% in 2016.
Several trends, including increased urbanization and population growth, enhanced infrastructures, improved road networks, airports upgrade, and utility connection have aided the Kenyan real estate market development. At the same time, the Kenya diaspora investment fund is also expected to galvanize the sector even further.
As investors strive to match the ambitious demands of a dynamic market and gain high returns, some noteworthy trends have developed over time.
1. Land Value
If anything, Kenya’s teeming population has ensured that the demand for land is sustained as comprehensive infrastructural development continues to boost land values. This has led to increased land purchase by investors, with many of these hoping to sell at higher future prices to reap vast rewards. Some investors also engage in land banking – where they generate income by temporarily putting the land to use.
2. Residential Buildings
One factor that continues to influence the Kenyan real estate market is the country’s booming population, which is tethered to an increasing middle class. This rapid growth has led to a significant demand for affordable housing to cater to urban settlers.
According to reports, Kenya has an annual housing demand of 250,000 units with an estimated supply of 50,000 units, resulting in a housing deficit of 2 million units. Developers are also seeking to reduce housing costs by building more houses.
3. Commercial Property
With Kenya regarded as an economic hub in Sub-Saharan Africa and the primary route to the East African market, top multinational firms and organizations seek to expand their operations. This increase in economic activities comes with an intense desire by these firms to revamp the office setting to match global standards.
Today, serviced offices are becoming more rampant. Another trend is the emergence of elegant and modern offices, equipped with amenities like a built-in gym, cafeteria, and unique entryways for handicapped individuals.
The Kenyan retail sector has continued to grow at an upward trajectory because of a rapid rise in mall space. As a result, Nairobi has the most significant retail space in sub-Saharan Africa – only behind South Africa in the African continent – making it a hotspot for investors.
Ranking African countries by mall space
South Africa – 23,000,000 sqm
Kenya, Nairobi – 391,000 sqm
Senegal, Dakar – 170,000 sqm
Uganda, Kampala – 170,000 sqm
Nigeria, Lagos – 150,000 sqm
Ethiopia, Addis Ababa – 60,000 sqm
Prime retail centers have experienced a high demand with a growing middle class culminating in more disposable income. So far, prominent malls that have sprung up include the Two Rivers Mall, Garden City, and The Hub, while international investors constantly seek means to acquire retail properties.
Kenya’s industrial sector isn’t left behind either, with the industry gradually shifting from the jampacked Nairobi’s Industrial Area, Baba Dogo and Mombasa Road areas where most of Kenya’s old industrial warehouses are located to more excellent areas within Nairobi like Machakos and Kiambu counties where they are easily accessible and are still close to major transportation routes.
The Kenyan real estate sector is bound to witness tremendous growth down the line as local and international industry players continue to explore viable investment channels in the wake of a dynamic market.
If you are seeking to make a foray into the real estate market or intend to buy a house in Nairobi, our experienced agents at Saif properties can guide you through every step of the way to ensure you make the perfect investment decision. So don’t hesitate to speak with us today!