Ample property investment opportunities exist for both local and international investors wishing to capitalize on the growing Kenyan property market. Although the rate of return on foreign investment in real estate in Kenya is high and to some extent guaranteed, it is only so when the foreign investment is in the right type of property and in the right location.
Foreign investment hot spots in Kenya
Most of the foreign property investment in Kenya is done efficiently within the cities. This includes areas such as:
The central business districts (CBD) of Nairobi, Kisumu and Mombasa. These mainly attract foreign investors interested in commercial and residential properties, which generate high rental returns.
Most foreign commercial rental property investors who invest in CBD target corporate organizations and institutions with the capital and resources to invest in long-term rental properties. Some have ten-year lease terms.
The outskirts of the city, such as Kitengela, Athi River, Thika and Ruiru
Provide additional space to accommodate crowded city residential areas, especially for parking and traffic jams.
Profitable for foreign investors because they reduce development costs.
- Become a lucrative area for upper and middle class residential and commercial properties for organizations and individuals.
- Along highways and byways in the city that previously closed areas are opening up. The most notable highways that are attracting more and more foreign investment include Mombasa Road, Thika Super Highway, Jogoo Rd, Ngong Rd, etc.
Most wealthy investors from Asia and the Middle East prefer to invest in Kenya’s major towns and cities in an attempt to reduce their investment risks and lower their capital costs.
Most European expatriates and other investors from the Western world prefer to make their foreign investments in tourist areas in an attempt to capitalize on Kenya’s booming tourism sector. The main areas of interest are:
Coastal areas of Malindi, Mombasa and Lamu
These resort towns have recorded a 20% increase in high-end residential real estate growth outpacing international coastal cities like Miami and Cape Town.
Significant foreign investments are made in the development of 5-star hotels, residential tourist complexes, luxury housing apartments, tourist lodges and restaurants.
Most notable are the foreign-owned villas and mansions that proliferate in these areas. The villas are used by foreign owners/investors for permanent residence, or rented out to wealthy local/foreign tourists or alternatively used as recreation areas when they come to Kenya on holiday.
National Parks and Wildlife Conservation Areas
Areas within and outside of national parks and wildlife conservancies in Kenya are building their status as a hub of high-end residential property for wealthy foreigners and locals who retire in these locations, or for those who see to Kenya as an ideal recreational destination.
Foreign real estate investments made in these areas are mainly tourist lodges, luxurious country houses, ranches, wildlife reserves, and tourist hotels.
Places that have seen an increase in property investments with respect to their proximity to national parks and wildlife conservation areas in Kenya include:
- laikipia: home of Lewa Wildlife Conservancy
- Mount Kenya Region– Home to major tourist lodges and wildlife conservation projects
- Tsavo East and Tsavo West: suitable for tourist lodges due to its rich flora and fauna
- Nakuru: low-cost foreign investment area
- Naivasha: A new and fast-growing tourist city that is not only ideal for tourism-related foreign investment such as hostels and hotels, but also lucrative for agricultural investment due to its fertile horticultural farms.