In 2023, property developers had to constantly adapt to changing trends to keep up with the increased tenant and buyer preferences.
The coming year won't be much different owing to fast-changing preferences which keep getting more sophisticated by the day.
Many Kenyans are now keeping tabs on trends in real estate which gives them insight into how the industry is moving.
Kenyans.co.ke takes a look at trends to watch out for in 2024.
Payment of Rent in Dollars
Over the past year, the Kenyan Shilling has continued to perform poorly against the dollar leading to companies and landlords opting to charge for office and residential space in dollars.
According to a report by KnightFrank, office rent prices stood at USD 1.2 per square foot at the end of 2022.
However, as the Shilling began shedding against the dollar in 2023, landlords started opting to charge rent in dollars to avoid incurring losses.
As it stands, the Kenyan Shilling is trading at Ksh154 against the dollar.
The report further noted that the trend of charging rent in dollars is influenced by the global standard where most commercial property is priced in dollars.
This trend is expected to continue in 2024 as landlords seek to strengthen their position even further.
Augmented Reality
This refers to the use of visualisation technology to represent real-world environments. The trend is common in gaming and entertainment as well as education and training.
In the housing sector, AR is increasingly being tapped to provide virtual tours of unfinished properties where the idea is to diagnose problems and institute corrective actions well ahead of time.
In the construction sector, AR is also being used in training and project safety simulations.
The technology is also being used to guarantee construction accuracy and efficiency.
AR also provides a platform to project presentations, allowing clients to examine an architectural design from any angle.
Blockchain Technology
A blockchain is an effective database mechanism that allows transparent information sharing within a business network.
The mechanism stores data in blocks that are linked together in a chain.
In real estate, the technology is used to digitise assets into tokens which can be traded online, much like cryptocurrencies.
Blockchain has disrupted the financial industry and is now being applied across various sectors.
Real estate is now warming up to the technology.
For instance, the technology makes it effective for leases to be signed and paid on-chain, removing the need for manual transactions.
The system also automates rental and dividend payments to property owners.
Global market players have identified blockchain as an effective means of making property transactions since it is faster, cheaper and more transparent.
Environment, Social and Governance (ESG)
Another trend witnessed in the real estate industry is how small and large scale tenants are increasingly becoming conscious of environmental and social trends and responsibilities .
Tenants are now looking for property that is Environment, Social and Governance (ESG) compliant.
ESG compliance involves erecting buildings that meet community standards on environmental sustainability. This helps in addressing climate change and social progress in architecture and design.
According to Knight Frank, property owners are actively targeting higher-quality space to mitigate tenant-retention challenges and meet increasing ESG considerations.
The metric gauges whether a property owner should invest in a particular geographic region. It also encompasses them identifying strategies that are better poised for long-term success.
