Foreigners push up rents by 23 per cent
The influx of foreigners working with multi-national companies led to a 23 per cent increase of rent prices in Nairobi suburbs, a UK firm has said.
This places Nairobi among top five locations with the highest increases in the world, according to ECA International.
The capital was ranked fifth after Caracas in Venezuela with 49 per cent, Dubai in UAE at 32 per cent and Sao Paulo in Brazil at 29 per cent.
The data was gathered from various local letting as well as relocation agents up to September last year.
Leafy suburbs
The most affected areas were Gigiri, Nyari, Thigiri, Brooklyn Heights, Spring Valley, Runda, Roselyn Heights, Loresho, Muthaiga, Ridgeways, Lavington, Kileleshwa and Karen.
Most embassies and expatriate residences are located in the leafy suburbs.
The ECA survey echoed a Hass Consult property index report released earlier in the year showing that towards the end of last year there was a four percent increase in the rental asking price in several of these estates with the exception of Muthaiga where it dropped.
The 2014 Knight Frank Residential Survey also confirmed the increase indicating that the asking prices in the majority of Nairobi’s suburbs increased by 4.9 per cent in the same period.
This was almost half of the overall increase marked in 2012.
Nairobi has subsequently slipped 20 positions to 31 out of 85 cities polled in the latest survey contained in The Wealth Report, 2014.
It showed that the top-end rents increased by 17 per cent from April to September last year, but slowed to 2.3 per cent by the end of the year.
“Emerging markets outperformed the world’s top financial centres. Nairobi recorded the strongest rate of growth in 2013.
Asking price
Prime rents rose by nearly 26 per cent as multi-nationals looked to strengthen their headcount in the Kenyan capital,” said Kate Everett-Allen, the firm’s international residential researcher.
In the Hass Consult report, Kileleshwa led with a 14 percent asking price increase.
The average price was Sh106,000 up from Sh92,000 in 2012. Muthaiga North also had a 12 per cent increase from Sh107,000 in 2012.
New and old tenants paid at least Sh119,000 in 2013.
Lower Kabete and Spring Valley also saw an increase of eight and seven per cent respectively.
The asking price in Nyari was Sh271,000 and Sh250,000 in Runda for a three-bedroom maisonette.
The suburbs have become the preserve of the rich as prices continued to increase over the years.