Real Estate Market Booms after Political Atmosphere Cools Down in Kenya
The Attitudes Survey data by consultancy firm Knight Frank states that about 24 per cent of dollar millionaires already own real estate businesses in the country, which place Kenya third after UK’s 67 per cent and United States’ 33 per cent.
Investors are targeting Kenya with residential and other property schemes as land values rise against the backdrop of a growing and urbanising population, strong economic growth, and government investment in infrastructure.
While the East African country’s GDP growth dipped last year to an estimated 4.8% amid drought and a tense, prolonged election cycle, analysts predict a rebound to 5.5% growth this year, and a continuation of rapidly rising property prices.
In May it emerged that a group of Nairobi investors under the name Cool Breeze Development plans to build five up-market, 14-storey residential blocks in Nairobi, spending just under $15m (Sh1.5bn) on the scheme.
Recently, a fund seeded by Kuramo Capital made an equity investment in Nairobi’s Century Developments, which plans to invest $200m over the next five years in real estate, including on student and affordable housing, and on the industrial and healthcare sectors.
These are just some of the developments planned as land prices have jumped by 17% in the Nairobi Metropolitan Area in the six years from 2011 to 2016, according to investment firm Cytonn Investments.
The firm predicts continued land-value appreciation in 2018 – by 10% in Nairobi – fuelled by a 14% increase in government infrastructure spending, a relaxation of zoning regulations, the digitisation of Kenya’s land registry, and a return of investor confidence following the peaceful resolution of the standoff between President Uhuru Kenyatta and his rival in last year’s election, Raila Odinga.
Kenya’s population growth rate of 2.6% is higher than global averages of 1.2%. This population is urbanising rapidly and there is a rising middle class, leading to sustained demand for housing and commercial development.