Nairobi has been ranked the city with the highest rental rates in Africa after recording the biggest rise of 28 per cent across the continent.
A report by Knight Frank dubbed Africa Logistics & Industrial Review indicated that Nairobi had recorded a steady increase in rent over the last three years.
The report further indicated that the increase was caused by a rise in demand in agriculture, e-commerce and the first moving consumer goods sectors.
The report further indicated that housing demand across the city stood at 80 per cent.
"Despite most stock being built speculatively, absorption rates remain high, driven by the agriculture and FMCG sectors. Unsurprisingly, average occupancy stands at 80 per cent. The buoyancy of demand is clearly reflected in the active development pipeline, but also in the performance of rents."
"In comparison to pre-pandemic rates, Nairobi recorded the highest increase in average prime rents across Africa, from USD4.70 (Ksh470) per square meter in 2018 to USD 6 (Ksh600) per square meter," read the statement in part.
The report also indicated that there was a surge in Warehouse development with a total of 170,000 sqm of property having been added in the last five years.
By 2024, Knight Frank estimates that 400,000 sqm will be added to the sector.
"Developers in Kenya have been responsive to growing demand, delivering over 170,000 sqm of speculative prime warehousing over the last five years, prior to which the prime market was confined to a very limited number of developments."
"A further boost to supply is expected to materialise in the form of developers such as Improvon and Africa Logistics Properties’ plans to deliver over 400,000 sqm of speculative space to the market by the end of 2024," continued the statement.
Kampala also ranked high in the report after recording Ksh666 psm while Dar es Salaam, Tanzania recorded prime rents of Ksh770 psm.
Another report by Hass Rental Index had in April 2021 indicated that Ongata Rongai witnessed the largest increase (3.4 per cent) in rental prices during the last three months of 2020.
A two bedroom apartment in this area currently demands an average of Ksh20,000 in monthly rent. In 2019, Ongata Rongai also witnessed the biggest rise in rental prices (8.1 per cent).
The increase in demand for houses in Nairobi's satellite towns has been directly linked to the surge in rental prices.
