Rent in Nairobi’s affluent neighbourhoods dropped by about eight per cent on average in June compared to December last year, a periodic property report shows, citing increased supply amid slowdown in demand.
The residential rental prices were, however, flat compared to June last year, consultancy firm Knight Frank says in its Market Update report for the first half of the year.
“The decline was occasioned by increased supply, giving tenants choice and room to negotiate with landlords,” the report says. “The top-end market segment is dominated by expatriate tenants, who pay out of their accommodation allowances, or are housed under corporate arrangements.”
With demand for upmarket property slowing down, partly due to downsizing of operations by firms which were angling for a piece of the nascent oil industry, developers are moving into middle-income areas where the returns have been relatively stable.
Some of the major developments in the January to June period targeted at middle-income market included the 130-apartment complex by Bric Company in Spring Valley.
Agricultural and Industrial Holdings also broke ground for 560 two and three-bedroom complex at a cost of Sh3 billion.
Development of units for the low-income segment, the report says, has been left to the national and county governments.
Ministry of Housing’s Kenya Slum Upgrading Programme got approvals to develop residential flats in Kibra for Sh1.3 billion.