What Does a Property Valuation Report Show?
Retail rent analysis in Nairobi is distorted by the issue of ‘key money’. Key money takes the form of a premium that can be as much as three years’ rent, paid in advance, in respect of retail units in a prime pitch at the top end of the market. Rents tend to vary in accordance with unit size and frontage in addition to specific location. The 1,000 sq ft (95 sq m) shop is the norm for a boutique style trader. The rent gap between the CBD and decentralised locations closed in the mid-1990s and Westlands is now commanding higher rents than prime CBD pitches.
Deteriorating security in the city has increased the demand for large apartments in secure, managed compounds as more people move out of detached houses on individual plots. The resulting affluence in flat dwellers has led to an improvement in the design, management and security of complexes at the top of the market with amenities including a swimming pool, satellite television and health spas becoming more the norm than the exception.
Prime multi-unit complexes are led by Riverside Park and include Clanson Court in Muthaiga, Jade Valley in Westlands and the recently completed St. Austin’s Gardens in the Lavington area. Typical units within these developments are three to four bedroom flats and town houses ranging in size from 1,800-3,200 sq ft (170-300 sq m), which tend to be in annual occupation by corporate tenants, although longer term residents now appear on the rent rolls.
Occupancy rates of over 95% would suggest continued demand for high quality multi-units that fully meet quality and management standards. Well-planned multi-unit complexes have shown equal, and sometimes better growth valuation of your property when measured against equivalent commercial developments and could continue to do so
While individual houses in prime locations such as Muthaiga, Lower Kabete and Gigiri have maintained their value, rents for detached houses are static or falling. Single houses on individual plots also suffer from high outgoings resulting in investment returns of as little as 5%.Most individual houses therefore tend to be owner occupied, with few transactions taking place in a depressed market.