reflected in improved production and consumption
of cement that grew by 12.6% and 7.1% respectively
during the quarter.
Mostly, land in Kenya is government-owned and
can be leased for 50 to 99 years. However, there are
both freehold and leasehold types of land. Foreigners
can acquire and develop ‘commercial class’ land
for income-generating purposes in Kenya, but
agricultural land cannot be acquired by foreign
individuals, unless it is bought through a company
which is majority-owned by Kenyan nationals.
Real estate transactions are normally quoted and
concluded in Kenyan Shillings (KES) and the
transaction costs in Kenya are relatively low - the
total transaction costs can be between 4.8% to 6.8%,
inclusive of a 1.25% real estate agent commission.
The process for completing the titling of a property
typically takes around 72 days. Market analysts are
monitoring the Kenya Revenue Authority’s mandate
to reinstate Capital Gains Tax. Plans are also in the
pipeline to establish a Real Estate Investment Trust
(REIT) by the Capital Markets Authority.
Offices
Due to limited availability of land and rentable
space within the Nairobi CBD, planning policy
has been changed to open up land use and supply
for a 9km radius around the city centre. Higher
supply has boosted the office sector, which is seeing
higher selling prices for property – ranging from
US$140-US$180/m2. Construction of premierand A-grade offices is increasing, encouraging more
and more private firms to relocate out of the CBD
into nodes such as Westlands, Kilimani, Upperhill,
Girgiri and Ngong Road. It is anticipated demand
for offices will remain high in 2014, driven by both
local firms and international corporations setting up
offices in Nairobi.
Retail
The retail sector in Nairobi has been characterised
www.reimag.co.za
by low vacancies and steady demand, especially for
new and more diverse retailers. Retail centres in
Nairobi currently have GLAs of less than 30,000m2
but, moving forward, this could change. Real
estate investors will closely watch the three major
mixed use-developments under construction in
the city this year. the Garden City Mall mixedused development; the Two Rivers retail and office
deveopments and The Hub with retail, office, hotel
and conference components.
Leisure
Over the past decade, Kenya’s leisure property market
has been dominated by golf course resort developments
which feature internationally-rated golf courses,
holiday homes, conference facilities, retirement
cottages, sporting facilities and theme parks in a secure
environment. Investment into game reserves and
commercial lodges for tourism is also popular.
Industrial
Industrial property has benefited from high rentals
on the back of limited zoning for industrial land uses.
High-demand industrial nodes are focused around
Nairobi CBD; Baba Dogo and Kariobangi South are
both strong industrial areas located some 10km from
the CBD. For 2014, Kasarani and Syokimau are
forecast to see increasing demand for cost-effective
and efficient warehousing and industrial space.
Residential
Residential development geared towards Kenya’s
growing middle class is bringing new homes onto
the market for sale at between US$55,000 and
US$200,000 or for rent from US$500 and US$2,500.
For 2014, demand for residential property is forecast
to outstrip supply, at least in the middle to upper
price range. There remains a significant under-supply
residential housing at the lower end of the market.
RESOURCES
Broll
CBRE Affiliate Network
Offshore Handbook 2014
31