Kenya is among the top-five favorite property investment locations for Africa’s super-rich, with nearly a quarter (24%) already owning real estate in the country according to the Attitudes Survey data for The Wealth Report 2018.
South Africa is the fourth favorite property investment location for Africa’s super-rich at 9 per cent.
In total, 4 per cent of the world’s super-rich already own property investments in Kenya, led by African, North American, European and Asian HNWIs. (High net worth individuals)
“The fact that Kenya is the top African investment destination of choice for HNWIs on the continent speaks volumes about the strength and growth potential of our property market.” Ben Woodhams, Managing Director at Knight Frank Kenya.
The Attitudes Survey collated responses of 500 of the world’s leading private bankers and wealth advisors, who between them represent over 50,000 clients with a combined wealth of more than US$3 trillion.
Property makes up 43 per cent of Kenyan high-net-worth-individuals’ (HNWIs) investment portfolios, excluding primary residences and second homes. This averages higher than their African counterparts’ at 39 per cent.
The majority of Kenya’s super-rich 59 per cent have invested in real estate in the country, while 27 per cent hold property interests outside the country, according to the Attitudes Survey insights. Respondents to the survey said 42 per cent of their Kenyan clients increased their exposure to property investments in 2017, further indicating confidence in the asset class.
Respondents said 46 per cent of their Kenyan HNWI clients are considering investing in property locally in 2018. This is higher than Africa’s average of 37 per cent and 43per cent globally of the super-rich who are looking to invest in properties in their home countries.
Kenyan HWNIs are more interested in investing in offices residential at 39 % (i.e. hotels, retail, private rented sector/multifamily) and agricultural property at 28%; student accommodation and logistics/warehouses at 22%; infrastructure at 17%; industrial at 11%; and healthcare and retirement housing at 6%.
According to Knight Frank’s 100-city Prime International Residential Index (PIRI 100) published in The Wealth Report, prices of prime residential property in Nairobi weakened by 0.9 per cent in 2017, which was an improvement compared to 2016 when the market recorded a 2.1 per cent drop.
Nairobi’s Karen neighborhood is among a select urban districts whose “location, infrastructure and vibe mean they are set to outperform the competition”. Karen witnessed rapid growth from the early 2000s, with many of the original five- and 10-acre plots developing into modern housing clusters with shared amenities such as club houses, gyms and swimming pools.
This period saw land prices soar from about Ksh2.3 million per acre to the current levels of over Sh50 million per acre, where they have now stabilized. Typically, houses currently sell for around Ksh80 million to Ksh110 million in Karen, although record prices are being achieved for larger stand-alone houses with more substantial gardens.