Report: Where land is still cheap in Nairobi
Athi River has the cheapest land in Nairobi area while the Central Business District (CBD) and Upper Hill remain the priciest, according to the latest report by an investment company.
Last year’s combination of low lending as banks reduced the rate at which they were giving loans and the bad environment created by political uncertainty however resulted in reduced demand for land.
As a result, Cytonn said in their report, land in the Nairobi Metropolitan area appreciated at an average rate of 3.7 per cent, down from a six-year average of 17 per cent.
Still, land does not come cheap in Nairobi and the areas around it that serve as residentials for the millions who troop into the city every day to earn a living. For an acre of land in the CBD, you will have to part with Sh634 million and for Upper Hill, Sh510 million.
These two areas are the commercial zones of the capital and there is apparently an oversupply of office space, which has affected the rate at which the value in these areas has grown.
Land in the commercial zones appreciated slowly, at 3.4 per cent, compared to the previous six years, when it appreciated at 20.4 per cent.
“The slow growth is attributed to the increase in supply of commercial developments with offices having an oversupply of 4.7 million square feet and therefore a decline in demand for land for commercial developments,” the report said.
At Sh4.1 million an acre, Athi River has the cheapest land in the metropolitan area, with an acre of land in Thika, Juja and Ongata Rongai at Sh9.2 million, Sh9.6 million and Sh9.9 million respectively.
In the category of satellite towns outside the boundaries of the capital, land in Ruaka, Limuru Road, is the most expensive at Sh77 million per acre. Ruaka is in Kiambu County. Its growth was boosted by the construction of the Northern Bypass and its proximity to the city has also played a part in making it a popular residential area.
Ruiru in Kiambu County is also high in the list of satellite towns, with land going for Sh19.7 million an acre. Limuru (Sh16.7 million), Ngong (Sh14.4 million), Ruai (Sh13.1 million) and Syokimau and Mlolongo (Sh12.1 million).
Majority of this land is unserviced – not connected to the sewerage or water distribution systems as well as electricity.
Land in these areas appreciated at the lowest rate, 2.7 per cent against the market average of 3.7 per cent.
“This implies that buyers are not willing to pay a premium for the services provided, rather opting for unserviced land, which is 36 per cent cheaper, and provide the services for themselves,” said the report released Monday.
In high rise residential areas, where zoning laws allow the construction of apartment blocks, land appreciated at 4.8 per cent over the past year. Kileleshwa is the highest rated in this category, with an acre going for an average of Sh306 million.
The cheapest area in this category is Githurai, where the land goes for Sh46 million acre. Others are Dagoretti (Sh99 million), Kasarani (Sh64 million) and Embakasi (Sh70 million).