Nairobi Remains The Strategic Capital Of East Africa In Property

By Soko Directory Team / Published June 30, 2022 | 1:17 pm




KEY POINTS

The Covid-19 pandemic fast-track adoption of e-commerce, with an increase in online purchasing and retailers, focused on developing their platforms, particularly in the Food and Beverage space.


Nairobi City leading in world Travel

KEY TAKEAWAYS


 The traditional office sector globally is still expected to account for just over half of all cross-border investment transactions.

In Africa, a rotation of assets by investors is expected, particularly private equity, into the industrial, residential, life sciences, and data center sectors.


Nairobi remains the strategic capital of East Africa and the first place international investors list as a preferred entry point into Africa.

In the investment market, new strategies are emerging, including ‘develop to hold’, and more landlords are expected to enter sale and leaseback transactions. This will likely result in greater capital redeployment into the real sector given its favorable outlook. The country has also registered rising demand for alternative residential asset classes.

Mark Dunford, CEO of Knight Frank Kenya, says “The demand for student accommodation and housing for young professionals is soaring. The growing number of undergraduates, a youthful population and an undersupply of formal student housing have seen developers responding by developing purpose-built student accommodation (PBSA).

With the mainstream market still suffering from an undersupply of affordable housing, demand for co-living is likely to continue rising for the foreseeable future. Investors find this sector attractive because of its resilience and strong long-term economic fundamentals.”

ESG Considerations Grow In The Office Market: The report highlights areas of growth and forecasts that could be expected in the real estate industry. In the office market, Knight Frank observed absorption of office space that was previously in over-supply in the lead-up to the covid-19 pandemic.

Some rental growth over the last quarter indicates that a rise in prime rents is expected due to improving occupancy rates and renewed interest from global tenants looking either to set up or expand their operations in Nairobi.

Overall, demand is centered on best-in-class space, with investors and occupiers zeroing in on schemes that satisfy their ESG (Environmental, Social, and Governance) criteria; a theme that is likely to intensify, raising questions about the future of the older, more secondary, non-ESG compliant stock. Despite this, the number of green-certified developments remains low.

The Retail Market: The Covid-19 pandemic fast-track adoption of e-commerce, with an increase in online purchasing and retailers focused on developing their platforms, particularly in the Food and Beverage space. However, traditional retail, especially convenience-led schemes, has also seen a strong rebound in the last six to nine months off the back of easing restrictions and people’s eagerness to get back to life as normal.

The Industrial Sector Outlook: The industrial sector is highly active and remains full of opportunity as one of the asset classes which has benefitted most from the pandemic globally. This has been primarily fueled by the increase in e-commerce, local storage, and data center requirements as well as home markets looking to reduce their reliance on internationally manufactured goods.

Prime Residential Market: The prime residential market is bouncing back, with growth attributed to pent-up demand. After two years of the pandemic, a sense of normalcy is returning with Buyers’ sentiments to get on with life motivating purchasing resumption plans.

There is also an interest from developers who are focused on bringing high-end branded residence projects to the market with the aim of selling units off-plan to both local and international buyers.

Capital Markets: On the investment front, alternative classes such as data centers and life sciences are quietly growing in prominence on investor radars.

Attracting meaningful volumes of institutional capital into Africa continues to prove elusive and recent global macroeconomic events are hampering matters further. However, certain real estate sectors on the continent have demonstrated relative resilience, in spite of the unprecedented global economic headwinds, particularly those that are modern, well-located, and sustainable.

In the short to medium term, a boost in investment volumes in what has been a relatively immature market is anticipated, providing investors with the opportunity to rebalance portfolios, execute business plans, and further their strategic goals. However, the traditional office sector globally is still expected to account for just over half of all cross-border investment transactions. In Africa, a rotation of assets by investors is expected, particularly private equity, into the industrial, residential, life sciences, and data center sectors.

Related Content: Which Opportunities Exist For Foreign Investment In Kenyan Real Estate?




About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

View other posts by Soko Directory Team


More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2022
  • January 2022 (293)
  • February 2022 (329)
  • March 2022 (360)
  • April 2022 (294)
  • May 2022 (271)
  • June 2022 (232)
  • July 2022 (278)
  • August 2022 (67)
  • 2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (259)
  • May 2021 (285)
  • June 2021 (273)
  • July 2021 (277)
  • August 2021 (232)
  • September 2021 (271)
  • October 2021 (305)
  • November 2021 (364)
  • December 2021 (249)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (333)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (251)
  • February 2019 (215)
  • March 2019 (283)
  • April 2019 (254)
  • May 2019 (269)
  • June 2019 (249)
  • July 2019 (335)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (318)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (275)
  • April 2018 (223)
  • May 2018 (235)
  • June 2018 (176)
  • July 2018 (256)
  • August 2018 (247)
  • September 2018 (255)
  • October 2018 (282)
  • November 2018 (282)
  • December 2018 (184)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (189)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (164)
  • February 2016 (165)
  • March 2016 (189)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (247)
  • September 2016 (233)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (164)
  • April 2015 (107)
  • May 2015 (116)
  • June 2015 (119)
  • July 2015 (145)
  • August 2015 (157)
  • September 2015 (186)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (205)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950