Saturday, June 22, 2024

Investing in real estate: Here are the top lucrative areas for land investment

The real estate sector has been on an upward trend for the past decade. Prices of houses and land have appreciated over time, and at one point, Nairobi was ranked the hottest property market in the world.

According to an investment report on Nairobi’s real estate, the general Real Estate sector grew by 0.3 per cent to hit 6.8 per cent in 2022 from the 6.5 per cent growth in 2021.

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This was in terms of property transactions and development activities, highlighting the increasing appetite for property among investors.

The reports show confidence in the real estate industry, and despite the inflation rate and weak shilling, investors who are prepared to venture into the sector in future are set to reap good returns.

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The question in every developer’s mind should be where to put their money. While the residential property market has performed relatively well over the last ten years, luxury and commercial properties are yielding better returns.

Advantages of investing in real estate when young

Luxury properties target high net-worth individuals and are located within affluent areas, and are tastefully designed and finished.

Such high-end developments have had to ensure the availability of additional facilities like restaurants, gyms, and clubs to attract clients.

Investors should also look into investing in commercial properties since they have also proven to yield decent returns.

Commercial properties include office blocks and mixed-use developments – like Garden City, Le’Mac, and Two Rivers – that embrace modern living and incorporate work and leisure facilities.

If deciding to put up offices, developers should ensure extra amenities like spas are available to appeal to a larger clientele.

How to invest in real estate in Kenya 

Investments Areas

Whether you are looking to invest in commercial or residential property, various Nairobi suburbs such as Lavington, Westlands, Kileleshwa, Muthaiga, Parklands, and Kilimani have proven to be ideal.

According to the 2022 HassConsult Quater Three Report, an acre of land in Lavington costs sh231 million, while a similar plot in Kilimani goes for sh403 million.

Commercial space in these areas is said to have better returns. A report by real estate and investment firm JLL Africa shows the monthly rent for one and two-bedroom apartments in Westlands range between Sh65,000 and Sh110,000.

The same units are priced at between Sh 60,000 to Sh80,000 and Sh65,000 to Sh85,000 in Kilimani and Kileleshwa, respectively.

To build or buy your own house: Here is what real estate experts say 

Other areas worth investing in are satellite towns such as Kitengela, Ngong, Athi River, Kiambu, Kiserian, Limuru, Mlolongo, Syokimau, Ongata Rongai, Ruaka, Ruiru, Thika, and Tigoni.

HassConsult, in its latest report, noted that land values in the satellite towns grew by over 10 per cent between 2007 to 2022, beating posh estates such as Karen, Kilimani, Muthaiga, Upperhill, and Runda.

The significant growth of land value in satellite towns was credited to the increasing demand for land in the area as city residents move to own land out of the capital.

Additionally, various infrastructure projects such as the Nairobi Expressway, the Expansion of Ngong Road, and the development of social amenities have contributed to the land value.

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