Why Nairobi Landlords Are Changing House Designs & Reaping Big

  • An aerial view Nairobi, Kenya's capital city
    An aerial view of Nairobi, Kenya's capital city.
    Capital FM
  • A section of Nairobi landlords is changing house designs to tap into the new trends in the real estate market to increase their returns in 2023.

    According to Knight Frank, a residential and commercial property consultancy, landlords and property owners are responding to increased demands for data centres and warehouses by rehabilitating their units to meet investors' preferences.

    Knight Frank's The 2023 Commercial Real Estate Outlook in Africa indicated that landlords and developers are expanding existing data centres and building high-quality warehouses.

    "A closer look at the Nairobi market indicates a rising demand for cloud storage requirements as businesses rapidly expand their online platforms, driving a surge in data centre requirements," Knight Frank stated.

    File photo of a data center hosting different servers and computing infrastucture
    File photo of a data centre hosting different servers and computing infrastructure.
    Sika GCC

    Justifying their real estate 2023 insight, Knight Frank observed the establishment of the Africa Data Centre (ADC) set a precedent for other hubs.

    "In turn, investors are increasingly active in this space, with Africa Data Centre (ADC), for instance, announcing an investment in excess of Ksh24 billion (US$ 200 million) for data centres in Nairobi and a third one planned soon," Knight Frank stated.

    Besides ADC, other data centres are owned and operated by Icolo, SimbaNet Comm and others owned by telecommunication companies.

    Data centres host computer systems, telecommunication storage systems and other computing infrastructure. They also host servers for different functions.

    Other than data centres, the new trend involving building spaces which are Environment, Social and Governance (ESG) compliant, is also driving a shift in the real estate sector.

    ESG-compliant buildings are eco-friendly. They also emphasise setting up structures which meet community standards on environmental sustainability.

    "Businesses are actively targeting higher-quality space to mitigate talent retention challenges and meet increasing ESG considerations, which are primarily confined to international businesses," Knight Frank added.

    With the country's economy recovering, other real estate experts projected positive growth in the sector.

    "Overall, Africa is slowly returning to normalcy, and the Commercial Real Estate market has registered growth in 2022. The sector anticipates a better year business-wise in 2023," the property consultancy firm indicated.

    In the 2022 third-quarter report, Hassconsult, a real estate company, pointed at a recovery outlook both in property and land sector.

    An aerial view of a section of Nairobi County.
    An aerial view of a section of Nairobi County.
    skyscraper center