This archive report was first published on 5 January 2022.
According to a recent report by Cytonn Research, the residential sector in Kenya recorded improved performance in FY'2021, with the average total returns increasing by 1.4% points to 6.1%, from 4.7% recorded in FY'2020.
The report highlights that rental yields averaged at 4.8%, a 0.1% drop from 4.9% recorded in FY'2020, indicating a reduced ability to raise rents due to a weak economy and constrained spending power.
Notably, Rongai emerged as the best-performing node, with a total average return of 8.8%, attributed to increased rental demand.
Detached units also recorded an improvement in performance, with average total returns to investors coming in at 5.6%, a 1.4% points y/y increase from the 4.2% recorded in FY'2020.
The upper mid-end segment was the best performer, with total returns at 6.0%, higher than the 5.8% and 4.9% recorded in the lower mid-end and high-end segments, respectively.
Infrastructure developments in Ruiru and Ngong contributed to their high performance, with average total returns of 8.2% and 8.0%, respectively.
Apartment performance also improved, with average total returns coming in at 6.7%, a 1.5% points y/y increase from the 5.2% recorded in FY'2020.
The lower mid-end satellite towns were the best performing segment, with an average total return of 7.3%, attributed to increased returns in major satellite town nodes with ongoing infrastructure developments.
