Property and PE Kenya Research Project: Outline and Methodology


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Past Returns

The residential property market has outperformed the NSE over the last 10 years. The residential property values in Kenya has gone up 357% from 2000 to Q3 2014, according to Hass Consult.

All properties recorded a decrease in rent by 0.1 percent in the Q3 of 2015, with apartments having the highest fall of 2.3 percent. The decline in rent for apartments led to the decrease in rental yields in the category to 6.29% by the end of December 2015 compared to rental yields of 7.14% recorded in 2014.

According to Cytonn Research, commercial offices have recorded relatively higher yields of 9.7% from 2013-2015. Gigiri, Karen, and Parklands recorded the highest yields among Nairobi office market with yields of 12%, 10.1%, and 10% respectively.

Expected Returns

Cytonn provides a projection for Karen and Ruaka, which are among the prime areas for property investment in Kenya. The conservative projection for rental yield per annum for Ruaka is 5% p.a, combined with a 23% projected appreciation brings a total return of 28% in the next five years.

On the other hand, the projected annual yield for Karen is 5% combined with a projected appreciation of 10% to give a total return of 15% in the next five years.