A number of posh estates in Nairobi have seen a drop in commercial and rental prices during the first six months of 2021 as the effects of the Covid-19 pandemic continue to bite.
In a report by Knight Frank titled Kenya Market Update 2021, it was indicated that the rental rates in select areas in Nairobi declined by six percent.
Units in Westlands saw a decline in rent with a 7.69 percent drop in the first six months compared to the same period the previous year.
Units in Upperhill and Kilimani each saw a drop of 11 percent in the stipulated period.
Other areas such as those along the Central Business District (CBD) saw the biggest drop, 20 percent, in rental rates.
The decline, albeit at a decelerated rate, was mainly attributed to factors such as the reopening of the economy, rolling out of the vaccinations in droves, and landlords adjusting the rental terms to accept lower rental prices.
"The continued oversupply of residential developments in certain locations such as Karen coupled with the current economic state still makes this niche sector a buyers' and tenants' market," read part of the report.
Retail rental rates, on the other hand, reduced from Ksh420 per square foot to Ksh400 per square foot.
In the case of office rates, the average rate decreased marginally from Ksh112 per square foot to Ksh100 per square foot.
Further, the report depicted that there would be an increase in rental prices in the second half of 2021 over the projected containment of the Covid-19 virus, a rise in economic growth as well as the increased flexibility from landlords and sellers.
"Over the review period, notable progress was made regionally by both the government and private investors in the affordable housing sub-sector," the report revealed.
A report by Hass Consult in May 2021 also indicated that most estates in Nairobi would experience a drop in rental prices as most household incomes had declined due to the pandemic.
Areas such as Gigiri (2.5 percent), Spring Valley (0.8 percent) Westlands (1 percent), Kitisuru (1.7 percent), Lavington (0.6 percent), and Loresho (1.2 percent) noted a sharp drop in rental prices.
The report indicated that all Nairobi property prices would improve by 1.2 percent in the second half of 2021.
