Higher Rental Yields in Nyeri Makes it a Haven for Real Estate Investments

In comparison with other Counties in Kenya, Nyeri has higher rental yields for commercial properties than Mombasa, Kisumu, Nairobi and Nakuru with yields of 13.0 percent, 10.0 percent and 9.6 percent and 10.9 percent, respectively.

Mombasa and Nairobi, however, have the highest yields at 6.0 percent and 5.6 percent, respectively, for the residential sector. Nyeri and Nakuru, however, have low residential rental yields at 4.1 percent and 4.3 percent, respectively, in comparison to Nairobi, Mombasa, and Kisumu, as the market comprises of families that prefer living in their ancestral land or own built houses in the urban centers.

According to Cytonn, they chose to invest in Nyeri Nyeri County so as to serve as the Mt. Kenya Regional Office due to its centrality in the region.

Nyeri Town is situated in the Central Highlands of Kenya, about 150 km north of Kenya’s capital city Nairobi, lying between the eastern base of the Aberdare (Nyandarua) Range, which forms part of the eastern end of the Great Rift Valley, and the western slopes of Mount Kenya.

It is the largest town in Nyeri County and the headquarter of Nyeri County and former central administrative headquarters of Central Province. This, therefore, makes the area a strategic location to serve all the counties located in Mt. Kenya regions such as Kirinyaga, Meru, Laikipia, Nyandarua, Muranga, Embu and Tharaka Nithi.

Nyeri has witnessed growth in infrastructure and amenities over the last five years attributed to:

1. Devolution due to flow of money from central government to county governments most of which is invested locally,
2. Tourism in the area which continues to grow,

• Infrastructure development,

785. Relatively higher incomes, with it being the second richest county in terms of GDP per capita in the country at USD 1,503, after Kiambu at USD 1,785. Rounding up the top 5 richest Counties are Kajiado at USD 1,466, Nakuru at USD 1,413 and Laikipia at USD 1,226 on 3^rd, 4^thand 5^th positions respectively
786. Its strategic central location in the Mount Kenya Region.

The water supply and sewerage are from Nyeri water and sewerage Company limited (NYEWASCO). The area is served by a number of main roads including Nyeri – Nyahururu road, Nyeri-Karatina road and the Nyeri – Nanyuki road.

The main factors driving the Real Estate Market in Nyeri are;

1. Kenya Regional Headquarters – Nyeri is centrally located bordering over five counties in the Mt. Kenya Region, such as Nyandarua, Laikipia, Meru, Embu and Murang’a. This has led to attracting Mt. Kenya Regional offices for both local and international companies such as the Safaricom Mt. Kenya regional hub, National Construction Authority (NCA) Mt. Kenya Regional Office, and Coca-Cola Mt. Kenya Bottlers Ltd, hence creating demand for office space, retail and in the housing sector,
2. Devolution – Devolution has opened up Nyeri town, attracting government institutions, private investors, and entrepreneurs to the county headquarters. This has therefore created demand for office space, retail space and residential to host all the investors and government officials,
3. Growth of middle-income earners –Growth of the middle-income earners has translated to increased disposable income hence creating demand in the housing sector and retail facilities, which translates to towns such as Nyeri,
4. Tourism – Nyeri County is on a major tourist circuit to Mt. Kenya and the northern region, hosting key tourist attractions such as the Lord and Lady Baden Powell graves, Mount Kenya and the Aberdares National Park. These, therefore, promotes the hospitality sector, hence creating demand for hotels, holiday homes, and conference facilities, and,
5. The growth of SMEs – The increase in the number of SMEs due to ease in business registration that takes a maximum of 2-weeks. Mt. Kenya Region hosts many of these companies and requires office space and housing for the employees, hence drive the demand for real estate.

Over the last few years, Cytonn Investments have been investing in the Nairobi metropolitan area. They however continuously do research in the other regions to see in what places they can undertake investments and developments on behalf of their investors.

The Real Estate Company has been carrying out research on various markets across the Kenyan Counties.  Currently, the firm has covered 13 Counties, among them being Laikipia, Meru, Mombasa, Kisumu and Uasin Gishu.

They also target to open offices in other Counties such as Kisumu, Mombasa, Nakuru and Uasin Gishu as they remain attractive from a macroeconomic perspective, are in need of modern real estate developments, and can support good returns for investors