While the commercial sector in Kenya has seen the biggest decline over the past 3 years, the industrial sector is emerging as the hottest real estate market segment in Kenya. This is being underpinned by the boom and growth in SMEs requiring warehousing and industrial space according to insights shared by Gikonyo Gitonga, Managing Director, Axis Real Estate Kenya in the latest Ask Me Anything (AMA) session run by Estate Intel.

 

Gikonyo further noted that market opportunities continue to abound in the market underpinned by the rising demographics. For example, Nairobi has a population of about 5 million residents but the population of people who work and come to do business in Nairobi  rises up to 7-8 million people. Diaspora Remittances too, have been on a rise with Kenya recording approximately $42b (to-be-confirmed) in remittances in 2021.

 

This has resulted in the residential and retail sectors also emerging as other sectors to watch out for in the market. In the retail sector, convenience stores especially are emerging as a big win for investors after the ongoing boom in neighborhood malls. This has further been anchored by the largely informal sector in Kenya that accounts for approximately 82% of Kenya’s working population. On the other hand, there hasn’t been much growth in the hotel industry, post-Covid. However, the shortlet end of the market has continued to grow amidst calls for regulations due to privacy and security concerns. 

 

However, while the real estate market in general remains promising and the market liberal to foreign investors, there are some specific nuances such as  land regime, and registry & land tenure system that investors need to be wary of.

The land tenure system in Kenya is quite complicated and can be like an extreme sport if you don’t have an experienced guide. This has been mitigated by Government initiatives to easen this up including the launch of Ardhi Sasa, a National Land Information Management System (NLIMS) aimed at digitizing all land records and public land documents in Kenya.

This initiative is set to be rolled out across the country after the pilot phase in Nairobi by the end of 2022.  “Anyone who owns land in Nairobi  can now log-on to the platform and then verify their land. To register, you’ll need to have your national ID or Kenyan passport. Foreigners can only register with an alien ID issued by the government.” Gikonyo concluded.