Ruaka’s Real Estate Performance Remains Attractive for Investment

Ruaka remains an attractive investment area, evidenced by the residential apartments’ total returns of on average 12.5 percent, compared to the average residential market returns of 8.9 percent.

Growth in the Real Estate sector in the area is said to be driven by the growing demand for land and housing in satellite towns, the construction of the Western Bypass, which will enhance access in the area, and the availability of social amenities and the growing state of investment grade developments in Ruaka.

Cytonn Investments report dubbed ‘Ruaka Real Estate Investment Opportunity’ noted that continued increase in property prices in the area is expected which in turn will accelerate with the upcoming Western Bypass, thus the market presenting a good investment opportunity.

Increased demand for real estate properties in the area has been attributed to the increased demand for housing mainly by the growing middle-class population.

In addition, Ruaka was ranked as one of best low mid-end satellite towns to invest in, according to Cytonn 2018 Market Review Report among other areas such as Donholm and Thindigua, which were ranked top with 14.4 percent and 13.8 percent total returns, respectively.

Factors Driving Growth in Ruaka

1. Good Transport Network: The area is accessible through main roads such as Limuru Road and the Northern Bypass, which links it to Kiambu Road. The area will also be served by the proposed Western Bypass, which on completion will link Ruaka to the Nairobi-Nakuru Highway at Gitaru. These roads connect Ruaka to and from several neighboring areas such as Westlands, Kiambu Town, Runda, Limuru, and Waiyaki Way, thus making the area easily accessible;
2. Presence of International Organizations: The presence of international organizations such as the United Nations (UN), United Nation Environmental Program (UNEP) in Gigiri, and International Organization for Migration (IOM) – Migration Health Assessment Centre, has attracted foreigners who not only boost the appeal of the town, but also create a market for residential and commercial real estate;
3. Relaxation of Zoning Restrictions: Ruaka town has seen an increase in high-density developments that have resulted in an increase in the value of real estate property. Land prices in Ruaka have grown at a 7- year CAGR of 12.2 percent from 40.0 million shillings per acre as at 2011 to 89.7 million shillings per acre as at 2018;
4. Security: Improvement in security in the area, with county measures on security and a general increase in security personnel in the country;
5. Hotels, Malls, and Recreational Facilities: Large commercial mixed-use developments such as Two Rivers, Riviera Mall, and the Village Market surround Ruaka. This is in addition to hotels such as Tribe at the Village Market and Trademark Hotel along Limuru Road. The large retail and commercial footprint create an opportunity for employment, thus favoring property development to house this increase in personnel.

Despite the above factors, the main challenge facing the Ruaka market is slow infrastructural development in comparison to the rate of housing development in the area, leading to challenges such as frequent traffic snarl-ups within the town.

According to Cytonn, there is a need for better planning and infrastructural development including road expansion and installation of a sewer system to accommodate the growing population.