The demand for Nairobi’s retail space spiked to 9 percent more than logistics and office space which registered 8.5 and 8 percent respectively in 2018 according to the Africa Horizon Report by Knight Frank.
The demand for Grade A warehousing in Nairobi is currently at its highest bringing in a monthly rent of 600 shillings per square meter, meaning those with retail space are making more money in rents as compared to others in the same real estate field.
In 2018, Africa recorded more than 700 separate inward investment projects, half of which originated from corporations domiciled in the US, UK, France, China, and Germany.
The investment destinations were broad although South Africa, Morocco, Kenya, Nigeria, and Ethiopia accounted for over half of the projects, according to the report.
In Nairobi, yields in 2018 stood at 8 percent for office, 8.5 percent for logistics property, and 9 percent for retail.
A-grade warehousing around the capital currently commands monthly rents in the upward of US$6 per square meter, almost double that of the predominant stock of older units that lack modern features such as cross-docking and intermodal facilities.
Ben Woodhams, Knight Frank Kenya Managing Director, said: “Yields in each of the market segments align to their risk profiles, with retail being much riskier in Nairobi currently hence the proportionately higher yield.”
According to the Africa Horizons report, top residential investment opportunities across the continent include student accommodation (with Zambia, South Africa, and Kenya being education hotspots), retirement homes, and middle-income housing as demographics change.
- Read: Domestic Capital Anchors Property Investment across Africa
- Read: Nairobi among Hotel Hotspots in East Africa – Knight Frank
- Read: 6 Things to Consider Before investing in Real Estate in Kenya
6 Things to Consider before investing in Real Estate in Kenya
The real estate sector is increasingly becoming one of the most attractive investment avenues in Kenya. This is due to a bulging population, coupled with increased urbanization and growing disposable incomes for most households.
- Know what you need
- Check your finance
- Set your goals
- Start budgeting
- Create a purchase plan
- Choose a location