In the latest Hass Land Price Index report for the first quarter of 2024, it’s clear that land remains one of the most lucrative investments in Kenya, with landowners in Nairobi’s satellite towns seeing significant returns on their investments.
According to the report, land values in the satellite towns surrounding Nairobi, including Athi River, Juja, Kiambu, Kiserian, Kitengela, Limuru, Mlolongo, Ngong, Ongata Rongai, Ruaka, Ruiru, Syokimau, Thika, and Tigoni, have increased by a staggering 11.79 fold since December 2007.
The contrast is stark when compared to Nairobi’s more central suburbs like Karen, Kileleshwa, and Kilimani, where land values have grown by 6.73 fold over the same period. The price of land in these central areas has surged from an average of Ksh30.3 million in December 2007 to Ksh203.7 million in March 2024.
Investors who placed Ksh1 million into Nairobi’s satellite town lands at the end of 2007 would now be looking at holdings worth approximately Ksh11.79 million.
The same amount invested in Nairobi’s suburbs would have yielded Ksh6.73 million, showcasing the satellite areas as higher yield investments.
When compared to other investment avenues, land in these satellite towns outperformed property, bonds, savings, and equities significantly. For instance, Ksh1 million invested in property in 2007, following the Hass Sales Composite Index for All Properties, would be worth Ksh2.71 million today.
The same amount in bonds would have increased to Ksh3.97 million, in savings to Ksh1.59 million, and a stark Ksh0.32 million if invested in equities.
Specifically, land values in areas like Athi River, Kiserian, and Kitengela have rocketed from an average of Ksh2.4 million in 2007 to Ksh28.8 million in 2024. This represents a major shift in land valuation in these regions, which are becoming increasingly desirable for both residential and commercial developments.
The top five satellite regions, in terms of value growth over the last decade, include Athi River, Juja, Kiambu, Kiserian, and Limuru. These areas have seen price changes of 1.97, 3.32, 1.76, 2.40, and 2.48 fold, respectively, with current land prices at Ksh19.3 million, Ksh20.9 million, Ksh47.9 million, Ksh11.2 million, and Ksh16.8 million per acre.
Notably, Kiserian, Limuru, and Ongata Rongai have led the charge in quarterly price gains, with increases of 9.4, 8.4, and 7.8 per cent, respectively. Kiserian offers the most affordable land among the surveyed satellite towns, with land currently priced at Ksh11.2 million per acre.
“Satellite towns are driving the revival of land as a competitive asset class with an average annual growth of over 10 percent," said Sakina Hassanali, Head of Development, Consulting, and Research at Hass Consult. “With interest rates projected to fall in the coming months, the stable price growth observed over the last two years should render land even more attractive as an investment.”
Market share data further emphasises the popularity of these areas among investors. Kitengela and Ruiru, for instance, currently hold significant market shares of 18.3 and 16.3 per cent respectively.
Other areas like Ngong and Syokimau also hold substantial portions of the market, at 9.3 and 8.1 per cent.
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