This archive report was first published on 4 September 2019.
Published on September 4, 2019, Knight Frank's Kenya Market Update highlighted a decline in prime residential rents and sales prices in Nairobi during the first half of 2019.
The oversupply of high-end developments in some areas, coupled with fewer expatriates relocating to Kenya, contributed to the decline. Additionally, a credit crunch led to low money circulation and spending power due to reduced disposable income. Multinationals downsizing also affected the niche market.
Prime residential prices fell by 1.8%, while rents reduced by 1.7%, resulting in an annualized decline of 6.7% and 3.3% in the year to June, respectively. This led to buyers and tenants benefiting from low prices and rents.
The shopping mall retail market experienced a 5.9% decrease in rent, dropping to $4.8 per square foot per month. Established malls maintained high occupancy levels at 90%, while new developments recorded occupancy levels of between 45% to 55%.
Landlords, facing declining demand for prime retail and residential space, resorted to providing concessions, such as long fit-out periods, partial contributions towards tenant fit-out, or discounted rentals, to retain existing tenants and attract new ones.
However, the office market performed well, driven by increased demand for shared workspaces and serviced office space. Small and medium enterprises, maturing start-ups, and multinational firms entering the country contributed to this demand.
