Real estate investments are expected to continue to reward investors this year. This is according to a 2017 investment outlook report by Cytonn Investments.
According to the firm, the equities segment which comprises of the Nairobi Securities Exchange will remain flat while the real estate sector will continue to thrive.
“The Kenya equities market is expected to be flat in 2017, following two consecutive of negative NASI performance of 8.5 per cent and 11.0 per cent in 2016 and 2015, respectively,” says the report.
Nonetheless, Cytonn is quick to note that the low performance by the market provides for good entry points for long term investors.
“The market decline so far has made valuations attractive, providing an attractive entry point for long term investors seeking return in the markets.”
However, real money will be made in the real estate sector. In 2016, says the report, real estate delivered high returns averaging 25.8 per cent across all themes, with the best performing themes being retail and offices with average yields of 10.0 per and 9.4 per cent, respectively.
In 2017, the sector is expected to continue with its good performance across all real estate themes compared to traditional asset classes. “The key drivers of real estate in 2017 will be the large housing deficit, demographic trends such the growing middle class, continued improvement in infrastructure and better operating and legal environment,” says Cytonn.