Ongata Rongai is the most profitable estate in Nairobi when it comes to real estate, a new report by HassConsult has revealed.
The report released on Monday, February 5, indicated that the satellite town located on the outskirts of Nairobi offered the best rental returns on an annual basis, at a rate of 15.4 per cent.
This means that investors who put up a Ksh1 million investment in Ongata Rongai rentals, reaped profits of Ksh154,000 in 2023.
Other estates that recorded best returns were Athi River at 15 per cent, Kitengela (11.6 percent), Loresho (11.5 percent) and Nyari (9.9 percent).
In comparison, high-end estates including Runda and Lavington recorded minimal growth in house price, with a change of 2.5 per cent and 1.0 per cent over the past year respectively.
The report, which covered the fourth quarter of 2023, further showed that overall returns in the real estate sector had grown, defying the weaker performance of the Shilling against the dollar.
"These returns competed favourably with those of Treasury bills and bonds whose net returns ranged from 9.5 percent to 17 percent in 2023. Concerns about the safety of bonds due to the government's high debt exposure however saw some investors seek alternative investments, which included property," the report indicated.
"The property returns from the best-performing satellite towns and suburbs also outperformed the NSE 20 Share Index, which had a return of -9.4 percent in 2023, and bank savings that averaged 3.8 percent in interest through the first 10 months of the year."
HassConsult further revealed that the property market offered a total return (capital gains plus rental yield) of 8.3 percent in the fourth quarter of the year, illustrating renewed resilience in the face of the challenging conditions that also included high-interest rates.
In the third quarter of 2023, HassConsult showed that Ongata Rongai was increasingly becoming an attractive investment hub due to the expansion of Magadi Road.
The construction of the stretch linking Bomas of Kenya and Kona Baridi was launched by President William Ruto on April 20 last year.
"Ongata Rongai was a front runner in quarterly price growth at 8.2 per cent, displacing quarter two leader Thika as developers anticipate improved access due to the resumption of the dualling of the Bomas-Rongai-Kiserian road," read the report in part at the time.
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