The Nairobi Metropolitan Area Industrial Market Overview
Linah Amondi . 6 months ago
Nairobi Gate
Tatu City
Tilisi
Share this post
Subscribe to our newsletter
Article Summary: The Nairobi Metropolitan Area (NMA) has been the centre of Kenya’s industrial market’s strong growth story. According to the data tracked by our partners, BuyRentKenya, the NMA accounts for approximately 90% of the country’s industrial space, with Nairobi county topping the list at 66% given its position as the country’s capital.
Introduction
Over the past seven years, the Nairobi Metropolitan Area (NMA) has been the centre of Kenya’s industrial market’s strong growth story. Consequently, the region, which comprises Nairobi, Kiambu, Machakos, and Kajiado Counties has recorded the highest concentration of projects in the country with the growth supported by: the e-commerce surge, flight to quality, positive demographics, improved infrastructure networks, government-led initiatives in line with the Vision 2030 plan, and Nairobi’s popularity as East Africa’s business gateway, consequently attracting foreign investments.
The NMA Accounts For Approximately 90% Of Kenya’s Industrial Market Space
According to the data tracked by our partners, BuyRentKenya, the NMA accounts for approximately 90% of the country’s industrial space, with Nairobi county topping the list at 66% given its position as the country’s capital. This is followed by Kiambu the home to Kenya’s first operational SEZ-Tatu City, Nairobi Gate Industrial Park (NGIP), Tilisi, and Northlands City. These communities have attracted major industrial investments such as ALP West in Tilisi and ALP North in Tatu City, consequently boosting its market share. Mombasa, Machakos, Nakuru, and Kisumu Counties are the other key industrial hubs in the country tailing Kiambu, respectively.
Source: BuyRentKenya
Map Of Major Industrial Areas In Kenya
Source: Google Maps, Estate Intel
Size of bubble represents market size
Nairobi And Kiambu Counties Have The Highest Rents and Prices In The Country
Further, a closer look at the country’s industrial rental performance shows that Nairobi is the best-performing location driven by its prime location, and a higher demand stemming from fast-moving consumer goods and agribusiness. Monthly industrial rents in Nairobi average Kshs 430 (US $3.4) per sqm, higher than the market’s average of Kshs 371 (US $2.9) per sqm. Kiambu follows closely with monthly rents averaging Kshs 409 (US $3.2) per sqm, and selling prices averaging Kshs 71,000 (US $552.5) per sqm.
Source: BuyRentKenya
Industrial Area, Ruaraka, And Mombasa Road Area have The Highest Pricing Rates In The NMA
Regarding performance by specific areas in the NMA, industrial area, Ruaraka, and Mombasa Road have the highest monthly rents ranging from Ksh 450-550 (US $3.5-4.3) per sqm, according to BuyRentKenya. This is attributed to their strategic locations near the city centre, and key transport and logistics hubs such as JKIA, SGR Station, and Inland Container Depot. Additionally, these locations had a headstart in the market as they have traditionally been the most popular industrial area zones, given their highest concentration of industrial developments in the NMA. Ruiru which hosts Tatu City, Northlands City, and Nairobi Gate follows suit with average rents worth Kshs 409 (US $3.2) per sqm.
Source: BuyRentKenya
Recent Industrial Investments Concentrated In Nairobi’s Metropolitan Areas
Historically, Nairobi has been Kenya’s key industrial hub, with its most recent investment being Sameer’s second industrial project along Mombasa Road in December 2023. While it still maintains its dominance, much of the recent NMA activities have been witnessed in its environs such as Kiambu and Machakos counties, owing to the increase in SEZs, improved infrastructure networks in the areas, and the availability and affordability of land.
As previously mentioned, Kiambu County is home to the country’s most popular SEZs such as Tatu City-Kenya’s first operating SEZ, and the Nairobi Gate Industrial Park (NGIP), where Impact North recently launched a textile project worth USD 40 mn. This is in addition to the famous master-planned communities such as Tilisi, and, Northlands City. These communities have attracted major industrial investments such as ALP West in Tilisi, as well as The Link, ALP North, and Zhende’s medical supplies factory in Tatu City.
Elsewhere in Machakos County, GRIT Real Estate Income Group completed the acquisition of the Orbits factory in 2022 and commenced its revamping process in 2023. Further, the government’s ongoing Konza Technology City which borders Machakos, Makueni, and Kajiado Counties, comprises various real estate uses including light industrial. Notably, the majority of the developments are private initiatives, with approximately 15% of the total projects in the region currently in the pipeline, according to Estate Intel.
Source: Estate Intel
Featured Project; Nairobi Gate Textile Park
Grade: A
Location: Ruiru, Kiambu County
Size: 100,00 sqm
Developer/Owner: Impact North
Value: USD 40 mn
Construction Status: Ongoing
Source: Estate Intel
Ultimately, the industrial sector boosts the country’s overall economic growth through employment creation, revenue generation, FDI growth, and manufacturing sector expansion, one of the largest economic sectors in Kenya. While we acknowledge the market’s progress and performance, the recent unpredictable taxation systems might deter optimum investments and uptake in the sector due to uncertainties. Various operators might shy away or minimise their operations in the country, as they seek other regions with stable or lower operation costs.
Estate Intel loves your feedback! Let the Insights team know what you think about the NMA’s industrial market performance by emailing [email protected].
If you require a market study or research, contact our Capital Advisors team using [email protected].
Related News
You will find these interesting
Linah Amondi . May 2024
Africa’s leading outsourcing firm CCI Global, in the presence of Kenya’s President William Ruto inaugurated the largest ...
Eneo Tatu Central
Gateway Real Estate
Linah Amondi . April 2024
Impact North, a logistics firm jointly owned by Improvon Group and Actis, has launched the construction of an A-grade wa...
actis
improvon
Linah Amondi . August 2023
Industrial market
Tatu City