As real estate developers experiment with new locations in a major shift from traditional property hubs, some regions across Kenya have started receiving heightened attention with prices rising significantly in recent years.
The coastal counties of Kilifi and Mombasa are some of the bright spots driven by new infrastructure projects.
Today, you can find as stylish a home in Kilifi as you would in Nairobi, thanks to growing fortunes in the county.
Tarquin Gross, the head of the residential agency at Knight Frank, notes that proximity to traditional amenities and new infrastructure projects continues to drive the attractiveness of certain zones.
He explains: ‘‘The expansion of road network and the port has equally raised the stakes of real estate in Mombasa city. Kilifi is more lucrative because of its nearness to Kivukoni School.’’
Kivukoni is an international nursery, primary and secondary school that targets wealthy families who do not have to take their children to schools in Mombasa or Nairobi.
There is also Tigoni in Kiambu County, whose proximity to the Nairobi central business district (CBD) and surrounding locations has made it equally attractive to developers, according to Gross.
He says the completion of the Nairobi Expressway has significantly slashed commute time, enticing potential home buyers.
In Naivasha, a colonial-style farmhouse sitting on a sprawling lake frontage of a 27-acre piece of land in Moi South Lake in Naivasha has an asking price of Sh430 million.
The main house is a thatched Cape-Dutch-style five-bedroom family home, complemented with several houses, cottages and staff quarters, an ideal family holiday home for the wealthy.
In recent years, Kenyatta Road in Kiambu has become the hub of high-end homes, with complete and ongoing developments.
The prime area is also the home of Ridge Front Garden Estate, Brookview and Green Apple Gardens, all catering to middle-class and upper-middle-class buyers and tenants.
The most attractive
Despite the rising popularity of new locations across the country, Nairobi’s high-end neighbourhoods of Muthiga, Karen and Kitisuru are still the most attractive to developers, with the prices remaining high in the last five years.
Gross says a five-bedroom house in Karen sells at between Sh85 million and Sh100 million while a similar unit goes for slightly higher in Kitisuru (at between Sh95 million and Sh110 million). ‘‘Muthaiga is most expensive at between Sh150 million and Sh200 million.’’
Nairobi remains a hub for prime property, thanks to its international attractiveness as an entry point to Africa by global brands, and few properties underline this attractiveness quite like the Global Trade Centre (GTC) in Nairobi.
But away from Nairobi, high-end buyers and renters have almost inexhaustible options of lucrative property investments to choose from, spanning beach-frontage properties in Vipingo and Manda at the coast, farmhouses in Nakuru, modern homes in Kiambu, Eldoret, Nanyuki, and Kisumu.
So, what are buyers and tenants looking for?
For the modern buyer or tenant, the property is no longer merely an empty space to establish a home or office. Today, class, comfort and sustainability are as much factors for consideration to buy and lease as are cost and functionality.
Those intending to buy or lease space for different purposes are, more than ever before, taking into account location, adjacent amenities and special features before spending money on a property.
The consequence has been a sharp increase in the cost of properties in Kenya, a departure from traditional property hubs and deliberateness to incorporate diverse features that meet customers’ needs.
‘‘We will see prime rent begin to climb again off the back of improving occupancy rates and renewed interest from tenants looking to either set up or to expand their operations in Nairobi,’’ Knight Frank said in June this year.
Arguably the quintessence of modernity in local real estate, the GTC incorporates both residential and commercial facilities, a standard in global cities such as New York and London.
The newest addition to Nairobi’s skyline features one, two and three-bedroom houses and penthouses in a property that also has a hotel, offices and wellness facilities.
In terms of office space, Knight Frank says there has been an increase in demand for best-in-class, green-certified property driven by the need to satisfy corporate customers’ ESG (environmental, social and governance) credentials, as focus shifts from merely making profits.
There is growing emphasis on construction of office buildings with future-proofed amenities and features that promote the health and wellbeing of workers. Some come with a wellness facility, a relaxation terrace and even an entertainment section.
A virtual tour of the GTC, for instance, shows large open spaces, greenery and swimming pools. Elsewhere in Europe, some office buildings have electric vehicle (EV) charging points in their basement for use by professionals working in them.
Spaces that incorporate these elements come at a premium. Data from different real estate companies point to an increase in rent in Kenya between 2018 and 2021, despite a slump in 2020.
Even so, there has been increased occupancies across the majority of high-end gated properties and absorption of Grade A and Grade B offices in the capital.
Monthly rent for prime retail office space in Nairobi currently ranges between $4.10 and $4.20 (Sh483 and Sh495) per square feet, according to different reports. A retailer occupying 10,000 square feet would pay about Sh4.95 million per month.
Former Knight Frank MD Ben Woodlams had earlier this year predicted that the market would remain stable ‘‘due to the favourable projected economic environment.’’
Charles Macharia, a senior research analyst at Knight Frank, agrees but admits that the prime residential sector remains a buyer/tenant’s market owing to oversupply in most areas, particularly in Nairobi.
Macharia notes that developers are having to ‘‘incorporate unique selling points in their property to maximise returns on investment.’’
Meanwhile, traditional prime zones of Upper Hill, Westlands, Pangani, Lavington and Kileleshwa in Nairobi are still experiencing heightened development activity, with both commercial and residential structures coming up.
Besides commercial and retail spaces, growth in the number of students in the country in recent years to about one million has pushed upwards the arc of demand for purpose-built accommodation. Acorn Holding and Qwetu are some of the brands in Kenya dedicated to student housing.
Facing an acute undersupply of high-quality facilities in this category, however, the cost for the available units remains unbearable for many.