There are ample real estate investment opportunities for local and international investors who wish to capitalize on Kenya’s growing real estate market. Although the rate of return on foreign real estate investments in Kenya is high and to some extent guaranteed, it is only high when foreign investments are made in the right type of property and in the right location.
Foreign Investment Hot Spots in Kenya
city investment
Most of the foreign real estate investments in Kenya are done efficiently within the cities. This includes areas such as:
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The central business districts (CBDs) of Nairobi, Kisumu and Mombasa. These mainly attract foreign investors interested in commercial and residential properties, which generate high rental returns.
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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.
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The outskirts of the city, such as Kitengela, Athi River, Thika and Ruiru
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Provide extra space to accommodate crowded city residential areas, especially for parking and traffic jams.
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Profitable for foreign investors because they reduce development costs.
- To become a lucrative area for middle and upper class residential and commercial properties for organizations and individuals.
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- Along city highways and byways that are opening up previously closed areas. The most notable highways that are increasingly attracting foreign investment include Mombasa Road, Thika Super Highway, Jogoo Rd, Ngong Rd, etc.
Most of the 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.
Turistic zones
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 the burgeoning tourism sector in Kenya. The main areas of interest are:
Coastal areas of Malindi, Mombasa and Lamu
These resort cities have seen a 20% increase in high-end residential real estate growth outpacing international coastal cities such as Miami and Cape Town.
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Significant foreign investment is made in the development of 5-star hotels, residential resorts, luxury housing apartments, tourist lodges, and restaurants.
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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 for rent to wealthy local/foreign tourists or alternatively used as recreation areas when they come to Kenya on vacation.
National Parks and Wildlife Conservation Areas
Areas within and outside national parks and wildlife conservation areas in Kenya are building their status as a hub of high-end residential property for foreigners and wealthy locals retiring to these locations, or for those who they see Kenya as an ideal recreational destination.
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Foreign real estate investments made in these areas are mainly tourist lodges, luxurious lodges, ranches, wildlife reserves, and tourist hotels.
Places that have seen an increase in property investment relative to their proximity to national parks and wildlife conservation areas in Kenya include:
- Laikipia: home of the Lewa Wildlife Conservancy
- Mount Kenya Region: hosts important 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 foreign tourism-related investments such as hostels and hotels, but also lucrative for agricultural investments due to its fertile horticultural farms.
