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Kenya’s real estate market remains stagnant in Q3

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Cytonn Real Estate, the development affiliate of Cytonn Investments, has released the Q3’2019 real estate market review, highlighting the performance of various sectors including the residential, commercial office, retail and land sectors.

According to the report, the real estate market performance remained largely stagnant in Q3’2019, with the residential sector yield remaining unchanged at 4.9 per cent, while commercial office and retail sectors recorded rental yields of 7.7 per cent and 8.0 per cent, respectively in Q3’2019, from 7.8 per cent and 8.2 per cent, respectively, in H1’2019.

The sector was mainly constrained by;

i) Delay in the processing of construction permits by some county governments,

ii) Oversupply in the commercial office and retail sectors with a surplus of 5.2 mn SQFT and 2.0 mn SQFT, respectively, as at 2018,

(iii)    Slow private sector credit growth.

 

In the residential sector, Ruiru and Kilimani ranked best in terms of rental yields recording 6.1 per cent and 5.8 per cent, respectively:

No. Residential Neighbourhood Price per SQM (Kshs) Rent per SQM (Kshs) Occupancy Rental Yield Total Return
1 Ruiru – Detached 92,178 407 80.4% 6.10% 4.2%
2 Kilimani- Apartments 119,276 863 75.9% 5.80% 4.1%
3 Donholm & Komarock – Apartments 72,033 382 89.9% 5.80% 4.5%
4 Kileleshwa – Apartments 116,294 765 86.5% 5.70% 6.2%
5 Kitengela- Apartments 60,750 400 71.8% 5.70% 4.5%
6 Athi River  – Detached 93,939 393 74.8% 5.50% 6.0%
7 Thika – Detached 66,778 458 79.4% 5.50% 5.2%
8 Upper Kabete – Apartments 80,883 447 82.0% 5.40% 5.2%
9 Rosslyn – Detached 164,377 848 83.3% 5.30% 5.3%
10 Parklands- Apartments 121,917 679 62.3% 5.30% 4.3%
11 Runda – Detached 229,183 1033 93.3% 5.10% 5.8%
12 Donholm/Komarock – Detached 87,571 342 98.0% 5.10% 5.2%
13 Thindigua –Apartments 94,083 472 90.8% 5.10% 4.7%
14 Ngong Road- Apartments 97,288 571 72.2% 5.00% 5.0%
15 Langata –Apartments 110,659 503 88.0% 5.00% 3.9%
16 Ruaka – Apartments 98,979 507 73.9% 4.90% 5.7%
17 Syokimau- Apartments 65,046 280 89.4% 4.90% 4.5%
18 Westlands – Apartments 145,299 806 75.5% 4.80% 5.8%
19 South B/C – Apartments 99,201 406 93.3% 4.70% 5.2%
20 Langata – Detached 137,755 675 93.1% 4.60% 5.2%
21 South B/C – Detached 106,460 421 95.7% 4.50% 4.1%
22 Syokimau/Mlolongo –Detached 74,211 306 83.0% 4.40% 5.4%
23 Loresho – Apartments 116,411 559 63.9% 4.40% 4.9%
24 Athi River  –Apartments 62,423 369 74.3% 4.40% 5.0%
25 Karen – Detached 188,172 763 73.8% 4.20% 4.8%
26 Kitisuru – Detached 219,812 842 76.7% 4.20% 2.5%
27 Loresho – Detached 149,941 941 88.2% 4.20% 4.5%
28 Runda Mumwe –Detached 151,951 563 89.5% 4.10% 3.9%
29 Lavington –Detached 200,187 648 77.2% 3.70% 3.7%
30

 

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