The Kilimani area seems to be getting its flair back. In 2016, Cytonn reported Kilimani to be a prime area for developers looking to develop residential property. A year later, tables have turned and Kenya has seen more developers looking to develop commercial property in the area. Most recently Cytonn announced the construction of Cytonn Towers, a proposed mixed-use development in Kilimani.
According to Data Fintech’s September 2017 Real Estate Report supply of commercial property in Kilimani currently surpassing the demand with median rent down by 10.7% in Q3 2017 from Q3 2016. This simply affirms the oversupply of commercial property found in several Nairobi area. Sale price for office space in Kilimani grew by 11.5% over the last one year. This is due to the increase in grade A offices that has taken place in the area. Overall gross yield of commercial property in the area was 23.8% in between Q3 2016 and Q3 2017.
A trend that has been noticed is the demand for old properties around Kilimani area which will be used to build new apartment and commercial units on the land. This caused a surge in prices of 3-bedroom houses for sale in the area from Ksh 26 Million in Q3 2016, to Ksh 30 Million in Q3 2017. Apartments and Townhouses experienced a drop-in sale prices due to diminishing demand.
Apartments however, brought in the highest increase in rental prices, surging by 4.0% between Q3 2016 and Q4 2017. The best investment decision for residential property investors would be houses. They gave the highest overall gross return over a 12-month period at 19.5%.
Read more here: DF Real Estate Global September 2017