Over the last 3 years, at least Ksh 300 billion has been poured into development projects in the city outskirt towns of Kitengela and Athi River.
From malls to gated communities to whole city projects, the two towns have seen a major influx in mega-projects.
As developers rush to meet the swelling demand for affordable housing, these two satellite towns are turning out to one of the most attractive areas for developers.
The expanding industrial and manufacturing base attracts low-skilled workers from all over Kenya and has become one of the fastest-growing municipalities in the country.
In March 2019, the Chinese real estate group, Beijing Damei Investment Company, announced plans to build a megacity in Nairobi’s Athi River area at an estimated cost of Ksh200 billion.
Dubbed the Friendship City, the developers revealed that it would be modeled after the mega Chinese parks that comprise homes, factories, and amenities like hospitals, schools, and shopping malls all in one location.
It is estimated that the city will have the capacity to host 150,000 Kenyans, many of them set to live and work on-site.
Still, in March 2019, Housing financier Shelter Afrique and Karibu Homes Parktel announced that they had completed the construction of 288 middle-class homes in Athi River.
Named Riverview Estate, the Ksh355 million development comprises one, two and three-bedroomed houses priced between Ksh2.5 million to Ksh5.8 million at the time.
Just a year earlier, Safaricom Staff Pension Scheme officially opened its Ksh4.3 billion shopping mall dubbed Crystal Rivers Project.
About 1.2 kilometers past the Athi River Interchange in Machakos County, the development consists of a shopping mall and a two-phase residential estate.
In Kitengela, mega projects such as Asili and Co-op Bank Housing scheme, the planned Konza- Isinya/Kitengela By-pass, and KCA University are just a few of many projects on a similar scale.
As recently as July 2020, Purple Dot International Limited, a residential and commercial real estate developer in Kenya broke ground for its Graylands phase 4 project.
The developer described it as a signature development of warehouses, after the successful completion and selling out of its phase 3 development.
The project consists of 36 units, each 8000 Sqft retailing at Ksh19.5 million with a projection of an annual rental income yield of 20%.
According to the latest Hass Housing Index report 2020, there is a growing appetite for residential development land in areas surrounding the city spanning as far as Ruiru, Ongata Rongai, and Limuru.
Continued provision of infrastructure in satellite towns has boosted their property prices as well as the growing demand for affordable units, leading to a relatively high price appreciation.
The recent launch of the Nairobi Commuter trains has also seen more Nairobi residents move to the very outskirts of the city.
Kenya is estimated to have a housing shortage of between 150,000 and 200,000 units in urban areas and more than 300,000 units in rural areas yearly.
On the other hand, it is worth noting that towards the end of 2018, Knight Frank Kenya, a property consultancy firm, issued an intriguing advert on behalf of one of its clients.
It was offering free rent for six months to new tenants at Rosslyn Riviera Mall along Limuru Road. At the end of the six months, these tenants would pay half rent.
This signaled that the allure of shopping malls that had taken hold in the country was now on a downward trajectory.
The property consultancy firm admitted that there was an ‘oversupply’ of malls in some locations.
This could explain why the major players in Kenya's real estate development sector have now shifted to setting up affordable housing in Kenya's fastest developing towns.
