Investors in the housing subsector have been tipped to invest in Rwanda’s real estate.
Investment firm Cytonn said there was a huge housing deficit in the East African country where affordable housing demand in Kigali, its capital, is high.
Cytonn’s last quarter report for 2019 shows Rwanda has a deficit of 186,163 houses with annual demand growing at a 16,923 units.
Tenancy is reported to be cushioned by long-term contracts, securing an investor’s returns once construction is completed.
Rwanda is seen as the best nation for housing investment in Sub-Saharan Africa, where Kigali has high dollarised rental yields.
Residential and retail returns stand at 8.1 per cent and 12.6 per cent respectively. This is compared to 5.6 per cent and 9.6 per cent respectively for Nairobi.
According to an East African Legislative Assembly (EALA) member, Kenyan investors willing to take advantage of this opening should be encouraged to pursue protocol engagements that will see Kenya and Rwanda administrations enter into a private public partnership.
“This is one area where Kenya should see an opportunity to offload its engineering strengths to Rwanda,” the MP said.
“This is one area where we can ship innovators, craftsmen and technologists through diplomatic pact between Nairobi and Kigali. Those local contractors who have been complaining of a shrinking market in Kenya should explore this new horizon in Rwanda”.