Industry News
High Cost of Land in Nairobi Scaring Away Developers
Over the last four years land cost in parts of Nairobi has shot up by a thousand per cent.
Super high land prices in Nairobi are pushing housing developers out of the Kenyan capital, leading to the rise of gated community developments away from the city.
According to Jenga Web managing director Nathan Luesby, many developers seeking to meet the rising housing demand are being priced out of the city property market – forcing them to develop commuter estates on the outskirts of Nairobi.
“Over the last four years land cost in parts of Nairobi has shot up by a thousand per cent, which is why we are seeing the rise of “super developments” where a developer buys a big chunk of land outside the city and puts a huge number of houses on it,” said Luesby.
An acre of land in Kilimani, for example, is selling for up to Sh350 million – a figure that most developers find unreasonable and almost impossible to make a substantial return.
Developments in the outskirts of the city are therefore looking more sensible and attractive to both developers and home buyers, especially now that there have been major improvements to road networks.
RELATED: Kenyan Real Estate Shifts Focus to Residential
The latest market data indicates that there has been an upsurge in the construction of new housing units in Syokimau, Kiambu, Thika, Kajiado, Naivasha, and other smaller towns – a trend that is expected to increase land prices in these areas.
“Recent investments in infrastructure are opening up outlying areas, lowering the costs to developers and raising the value of property in smaller towns,” Luesby said.
Property analysts however say Nairobi remains the best bet for investors looking for high returns from resale or rental income while the city outskirts are suitable for individuals looking for retirement or holiday homes.
“Investors buying property to resell or collect rents look at the possible profit margins that set Nairobi far apart from other towns,” said Peter Mwathi, a Nairobi-based property dealer.
Benson Ndeta Withdraws Sh28bn Bamburi Takeover Bid
Amsons Group offered Sh23.6bn to acquire 100% of Bamburi shares.
Kenya Bets on South Korean Tech to Solve Housing Woes
Aluminum formwork enables faster construction with reusable molds.
State Orders Removal of Asbestos Roofs in 90 Days
Asbestos causes mesothelioma, a cancer that is difficult to treat.
KenGen Seeks Sh590bn to Add 1,500MW to National Grid
The company has secured financial backing for a 300MW geothermal project.
Turkish Firm Begins $3bn Uganda Railway Project
Yapı Merkezi is expected to complete the 272-kilometre railway in 48 months.
Kenya Plans Underwater Museum for Shipwrecks
The facility will be the first of its kind in the sub Saharan Africa.