Rental Increases Slow Down in 1st Quarter of 2015

Rental Increases Slows Down in 1st Quarter of 2015

According to the Knight Frank Prime Global Rental Index Q1, the demand and activity in the prime residential rental market has remained flat, registering an average increase of 1.3% for the quarter compared to 3.5% a year ago, with the slow down being driven by the emerging markets. Despite Africa registering strong growth, Nairobi’s rent increase was minimal at 0.7% compared to 4.3% for the rest of Africa.

This can be attributed to higher rental increases in the previous years and also the insecurity situation that faced the country in the first half of the year. With all the measures taken to curb insecurity, together with Kenya attracting a number of conferences aimed at increasing economic growth rate in the region, we expect an increase in people looking for housing and this will lead to increased rental rates.

This week, the Westgate Shopping Mall outlet in Nairobi, which was shut down nearly two years ago after a terrorist attack, reopened its doors. The refurbishment of the mall cost approximately Kshs 3.7 bn. We believe the reopening will change the global perceptions regarding security in the country and restore confidence.

To increase confidence further, the International Reserve Group, an Israeli firm that has more than 10 counterterrorism experts, will be in charge of security at the mall, which will additionally lead to skill transfer to the security personnel and staff they will be working with closely.