Kilimani, Westlands and Thindigua best for construction of apartments

Kilimani, Westlands and Thindigua are the best areas for construction of apartments while Karen, Runda Mumwe and Ruiru are ideal for detached houses.

This is according to the latest Cytonn Nairobi Metropolitan Area Residential Report which says the annual returns from real estate marginally reduced to 8.2 percent in 2017, down from 9.4 percent attributed to the prolonged electioneering.

Reduced lending to the private sector as banks protested implementation of the interest rate cap also influenced the marginal reduction in annual returns for developers in 2017.

Apartments recorded relatively high returns with an average of 8.7% p.a, 0.5% points higher compared to the overall residential market average of 8.2%.

Kilimani, Westlands and Thindigua were the best areas for apartment development attributed to good infrastructure and easy access to business nodes.

Detached units recorded subdued returns in 2017/2018 with average total returns of 7.6% p.a, 0.6% points lower compared to the market average of 8.2%.

Karen, Runda Mumwe and Ruiru were the best areas for detached housing units’ development.

Ruiru had the highest returns in the detached category, with total returns of 11.7% p.a.

The report indicates that Kilimani, Upper Kabete, Thindigua, Ruaka and South B/C recorded double-digit total returns, boosted by good infrastructure, and accessible locations in relation to places where most people work, such as the Nairobi CBD, Upperhill, and Westlands.

Cytonn report concludes that with surplus supply in selected areas, investors should carry out market research to identify specific market niches.

  

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