Serviced apartments are enjoying increased bookings from diaspora families coming home for the Christmas festivities. A survey across Nairobi’s affluent suburbs reveal an occupancy rate of up to 80 percent now and annual occupancy rate of 70 percent for the rest of the year.
Peter Karuga, the real estate business development manager at Vaal says serviced apartments have given investors good returns of up to 13 percent compared in investments in other sub-sectors that returned a four to five percent return.
“We have observed the market for the past three years and have seen a commendable trend for serviced apartments. We are investing in a development along Riverside Drive (Divine Apartments) that will rise 11 floors hosting 231 apartments of one and two bedrooms,” he said.
Realtor Cytonn Investments chief executive Edwin Dande added, “serviced apartments command very strong rental yields of about 12 percent, compared to residential yields that stand at 4.9 percent. If you add another eight percent of capital appreciation, we are targeting a total return of 20 percent per annum.”
Cytonn through its newly opened Nairobi’s Cysuites Apartment Hotel is banking on the growing expatriate community that prefers a settle-down-as-fast arrangement that guarantees them privacy and a homely atmosphere.
Trianum Hospitality, a consulting and management firm in charge of serviced apartments attributes the growth to a fast rising clientele of corporates, multinational companies, diplomatic and the diaspora community as well as businesspeople from across Africa.
Mutheu Muna-Mwaniki, Trianum Hospitality's CEO says 2019 had seen a rise in Japanese and Chinese customers streaming in with greater emphasis placed on quality of service and security.
“Serviced apartments are different from conventional hotels since guests can request meals to be prepared to their tastes. Inside each room, customers have their own kitchen to prepare meals and an electric laundry machine.”
“International guests get almost the same quality of life they enjoy back home including shopping and airport pickup services. This ensures incoming clients hit the road running upon arrival as they can work from their rooms and attend to meetings within the facility’s boardrooms or be dropped at a meeting venue,” she says.
Monthly rent
Ms Muna-Mwaniki adds while traditional hotels only provide bed and breakfast, serviced apartment hotels also organise daylong excursions to museums, art galleries, national parks and to sporting events.
The high demand for serviced apartments has also partly been fuelled by referrals from clients and online booking sites.
Incoming scholars on short term stay also prefer furnished apartments due to their convenience and privacy.
Some serviced apartments range from Sh150,000 to Sh400,000 a month for four people sharing while day clients pay between Sh9,000 to Sh20,000.
The Trianum CEO said Kenya is now witnessing built-to-purpose serviced apartments that incorporated ‘home spaces’ style.
For real estate, serviced apartments seem to be hitting a sweet spot as the high-end real estate market suffers.
Prices of properties priced from Sh70 million to Sh110 million in upmarket neighbourhoods such as Karen, Runda, Kitisuru, Loresho, Rosslyn, Muthaiga, Lavington and Spring Valley have reduced, according to Knight Frank.
“It a buyers’ market now and they can therefore negotiate favourably,” said Knight Frank.
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