Nairobi's luxury real estate market

For years, Kenya has widely been regarded as the East Africa’s economic, logistics, commercial and financial hub. This has attracted many foreign exporters and investors. In 2019, the World Bank’s ‘Ease of Doing Business Index’ ranked Kenya 56th globally and this had been improving from previous years. Kenya has also seen a significant increase in foreign direct investments with most foreign investment going into renewable energy projects.

Kenya’s real estate market has been one of the fastest growing contributing 10.5% to the country’s GDP in 2000 and increasing to 20% in 2021. Areas such as Westlands, Lavington, Kilimani and Kileleshwa contribute the most with an average rental yield of 12% for unfurnished units and 20% for furnished units. Over the past few years, there has been an increase in sales of high-value residential properties due to the greater margins of price corrections in this segment. With the Central Business District getting more and more crowded, many companies, investors and NGOs are moving to properties in areas outside the CBD such as Parklands, Weslands, Kilimani, Kileleshwa and Gigiri for residential and commercial purposes.

In a global index that tracks price movements in the top five percent luxury properties across 45 cities in the world, Nairobi has been ranked ahead of London. The Prime Global Cities Index by realtor Knight Frank, which listed Nairobi as the only African city listed among 45 global cities that recorded annual growth in the third quarter of 2022, shows that the city’s rankings has moved up seven places to 29 in the 12 months to September from 35 in the same period last year. This was two positions ahead of London, which ranked 31, and one position behind Geneva. Luxury houses registered a 2.9% price growth in 12 months to September 2022.

Luxury real estate: 3408 Belva                                                       The award winning 3408 Belva Homes under construction in Parklands is set to be completed in 2024

With a strong ongoing demand for homes in the upper end of the market, supply is always low in this sector of the market. The increased investment in infrastructure such as the Nairobi Expressway will only see the demand increase. Other factors that will increase the demand are the changing tastes and sophisticated lifestyles, due to exposure to international designs and trends, thus creating demand for lifestyle products in Kenya compared to other jurisdictions, Kenya’s property market has the potential for higher rates of return. This has inspired elegant properties such as the award winning 3408 Belva in Parklands that features 3 bedroom, 5 bedroom simplex and 5 bedroom duplex apartments set to match international luxury standards with beautiful views. Set to be completed in 2024, it incorporates modern features such as vertical gardens, solar panel walls, cascading waterfalls among numerous other amenities, this development provides a unique opportunity for investment into the lucrative Kenyan luxury property market for both local and foreign investors.

 Foreign investors can also enter Kenya’s real estate market relatively quickly. Foreigners are welcome to purchase ‘commercial class’ land and property in Kenya. Foreigners may own property in Kenya in their names. However, the Constitution (2010), the Lands Act (6/2012), and the Land Registration Act (3/2012), subject to certain limitations, grant the right to any person, either individually or in association with others, to acquire and own land in Kenya. This is significant because many foreign investors have been misled into believing they cannot own property in their names.

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