Satellite Towns Overtake Nairobi Posh Estates as Profits Multiply 10-Fold

A photo collage of an aerial view of Kiambu Town (left) and apartments at Fourways Junction along Kiambu Road (right).
A photo collage of an aerial view of Kiambu Town (left) and apartments at Fourways Junction along Kiambu Road (right).
Properties in Kenya

If one had bought land in Syokimau in 2007, the same person would count himself a millionaire by the end of 2022 because prices had increased tenfold.

According to HassConsult, a real estate company, the value of land in 14 satellite towns appreciated ten times between 2007 and 2022, pointing at a positive trajectory in property investment.

In its 2022 third-quarter report, HassConsult revealed that proceeds from land investments in the 14 satellite towns surpassed similar investments in premium estates in terms of bonds and even equities.

For instance, Ksh1 million would have yielded Ksh10 million by the end of 2022 compared to Ksh6.29 million in suburbs, in a similar period.

Aerial view of Karen Estate in Nairobi.
Aerial view of Karen Estate in Nairobi.

The other satellite towns that witnessed such growth include; Athi River, Juja, Kiambu, Kiserian, Kitengela, Limuru, Mlolongo, Ngong and Ongata Rongai.

Ruaka, Ruiru, Syokimau, Thika and Tigoni are also part of the satellite station.

According to Sakina Hassanali, Head of Development Consulting and Research at HassConsult, investment in land in Nairobi satellite towns was even more lucrative compared to savings in a similar period.

"The Hass Land Composite index, Nairobi satellite index value was 1037.4 outperforming Nairobi suburbs which had an index value of 628.5," she stated.

Superrich Kenyans also increased their appetite for land in satellite towns in search of privacy and this also contributed to the sharp price increases according to Knight Frank's 2019 report

Between July and September 2022, land in Syokmau was Ksh22 million per acre compared to Ksh3 million in 2007.

Hassconsult documented that some homeowners were even willing to negotiate prices of their homes in posh areas at throwaway prices so as to make investments in the satellite towns.

However, the big question remains to be; how did the 14 satellite towns become lucrative?

Simply put, infrastructure development, affordability and other social amenities.

A Standard Gauge Railway (SGR) train while in transit.
A Standard Gauge Railway (SGR) train while in transit on June 18, 2021.
Kenya Railways

1. Infrastructure

As investors purchase land, infrastructural development is one of the key factors people consider. 

Notably, the construction of roads has been credited for the soaring land prices given that they make remote areas accessible. This also opens up places for other investments such as schools and malls among others.

“On average, land prices in the satellite towns have risen by more than six-fold and will continue to increase as infrastructural developments like Standard gauge railway near completion,

"Demand is also high for land in the satellite towns that enables future expansion of public and private institutions like universities, private schools, hospitals and co-operative societies," Hassconsult detailed in its 2015 fourth-quarter report.

Other infrastructural developments which saw the value of land increase include the Standard Guage Railway (SGR), Eastern bypass and the Nairobi expressway among others.

2. Affordability

In comparison to posh estates within the city, land in satellite towns was 10 times cheaper.

For example as of September 2022, an acre of land in Westlands retailed at Ksh448,100,000 while Ruaka - which was the most expensive among satellite towns retailed at Ksh96,900,000.

In 2015, an acre of land in Wetlands went for Ksh388 million while a similar plot in Ruaka was an average of Kh50 million.

Fanaka Real Estate in its 2022 report also pointed out that some towns were selling land at affordable prices despite mega infrastructural development.

"The dualling of the Eastern bypass set to be completed in January 2023 has seen land in the area sold at affordable prices despite the increase in value of the parcels," read the report in part.

An image of section on Nairobi Expressway along Mombasa Road.
An image of a section on Nairobi Expressway along Mombasa Road.