Land prices in Nairobi have shot up five-fold over the past seven years with Upper Hill emerging the most expensive address in the city.
A report by HassConsult Real Estate reveals land prices have appreciated by 535 per cent with an acre that cost around Sh30 million then now going for Sh170 million.
“The index, which compares Nairobi’s land price movements to other asset classes and commodities, found that the city’s land had outperformed all other asset classes in return on investment,” said Felix Gichaga, regional business development head at Stanlib, a HassConsult partner.
Land prices have shot up beyond the affordable range for individual buyers, leaving institutions, investment groups and companies to snap up prime property in the suburbs and near the City Centre, according to HassConsult head of research and marketing Sakina Hassanali.
Upper Hill was listed as the most expensive where an acre is going for Sh470 million followed by Milimani at Sh370 million.
According to Ms Hassanali, these areas have witnessed unprecedented growth in housing and construction of commercial buildings, forcing prices up.
Other factors that have contributed to this trend include zoning, accessibility, infrastructure and general desirability of land within the suburbs.
HassConsult said it expected land prices would rise in Eastlands on the completion of the recently launched Outering Road upgrade like it happened with the building of Thika Superhighway.
Embakasi was named the estate where rent went up by the highest margin last year with an increase of 31 per cent followed by Kileleshwa at 27.9 per cent and Lang’ata at 24 per cent.
“Urban land has delivered the highest return of all asset classes in the last seven years followed by property by 98 per cent from 2007,” says part of the report.
Stanlib chief investment officer Kenneth Kaniu said: “Clearly, this puts the city’s land prices into a bracket of investment that is in a league of its own.”
The research relied on published property advertisement.