The Nairobi Metropolitan Area (NMA) has been experiencing significant growth in its real estate sector, particularly in land prices. The second quarter of 2024 showcased a positive trend, marking a notable shift from previous quarters.
According to the Cytonn Monthly – July 2024 report, the average selling prices for all properties in the NMA posted a 1.0% increase on a quarter-on-quarter (q/q) basis in Q2’2024, an improvement from the 0.5% decrease observed in Q2’2023. This growth reflects renewed investor confidence and an uptick in demand for real estate assets.
Land prices in the Nairobi suburbs also showed impressive growth, with a 1.8% increase on a q/q basis, compared to a 0.06% decline in Q2’2023. On a year-on-year (y/y) basis, land prices recorded a 6.9% increase, significantly higher than the 1.2% increase noted in the previous year. This surge is indicative of the growing interest in land investment as a stable and appreciating asset class.
The report attributes this positive trend to several factors, including improved infrastructure, increased urbanization, and a growing middle class with higher disposable incomes. Additionally, the government’s efforts to streamline land registration processes and enhance property rights have bolstered investor confidence.
The commercial office sector also saw notable developments, with the Postal Corporation of Kenya opening 79,626 square feet of office space for lease across 13 branch offices in seven counties. This move aims to generate revenue from idle assets and meet the rising demand for office spaces.
In the hospitality sector, Accor, a prominent hospitality group, opened the Gem Forest Hotel along Nairobi’s Limuru Road. This new property, comprising 105 rooms and various amenities, marks Accor’s ninth venture in Kenya, highlighting the country’s growing attractiveness as a hospitality investment destination.
The report further mentions that Real Estate Investment Trusts (REITs) are gaining traction, with the Capital Markets Authority (CMA) granting a license to Mi Vida Homes Limited to operate as a REIT Manager. This addition brings the total number of REIT Managers in Kenya to 11, signifying the sector’s expansion and increased investor participation.
As Nairobi’s real estate market continues to evolve, stakeholders must stay informed about these trends and opportunities. The positive trajectory in property and land prices, coupled with infrastructural developments, positions Nairobi as a promising investment hub in the region.
