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Land prices in Nairobi City’s suburbs rose by 1.6 per cent during the third quarter of 2024, while those in Nairobi’s satellite towns rose by 3.02 per cent; this is according to the HassConsult Land price indices.
The indices indicate that the price growth was supported by rising land demand for new developments as the real estate sector continued its recovery from a prolonged slump. In the city’s suburbs, land prices have now gone up by more than one per cent in each of the last four quarters, breaking the prior run of 26 straight periods of sub-one percent growth.
Parklands, which has had a surge of development activity—for both commercial and residential developments in the last two years—led the market with land price increases of 3.4 per cent to average Sh434.2 million per acre.
Langata and Kileleshwa also made a strong showing with gains of 2.9 per cent and 2.8 per cent respectively, indicating that demand is shifting back to areas that can support multi-dweller units in a market that still remains price sensitive in a tough economy.
“The leading suburbs in quarterly land price growth have emerged as the city’s hotspots for apartment and mixed-use developments, hence the demand-driven price increase,” said Ms. Sakina Hassanali, Head of Development Consulting and Research at HassConsult.
Nairobi’s satellite towns, Mlolongo (6.6 per cent), Thika (6.3 per cent) and Kiserian (4.7 per cent), recorded impressive price growth in the second quarter, driven by a mix of attractive pricing levels and upcoming infrastructure development.
Mlolongo continued to enjoy the benefit of easier access to the city via the Nairobi Expressway, with the areas mix of residential and land industrial developments helping sustain demand for land.
In Thika, the Kiambu County government’s recent announcement of a new masterplan to transform the town into an industrial smart-city has seen developers race to take up land in anticipation of a potential jump in demand for housing and commercial outlets in the area.
The county plan envisages additional roads that will open up the outlying areas of Thika for commercial development, creating new jobs that will attract demand for residential units.
“Prices are more dynamic in satellite towns compared to suburbs, due to evolving development plans and the impact of new infrastructure on buyer behaviour,” Ms. Hassanali added.
Land in the Nairobi satellite towns has also been growing at an annual rate that rivals the returns from other competing asset classes such as bonds and shares at the Nairobi Securities Exchange (NSE).
Prices in Syokimau, Limuru, and Mlolongo went up by between 18 and 18.5 per cent in the year to September, with bond returns expected to fall as the Central Bank of Kenya (CBK) cuts its rate. The attractiveness of land as an investment asset will continue to increase.
By Joseph Ng’ang’a
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