EXPERT ANALYSIS
dustrial land prices at over $250 per yields as low as 7% are understood to m² and limited land availability in have been achieved on a handful of these traditional areas, there is pentwell-let commercial properties. up demand for both modern wareIn summary, there is increasing house space and serviced industrial over-supply in several areas of the sites. Location criteria are challenging, Nairobi commercial real estate marwith occupiers looking for affordable ket. Offices and malls may well exland prices, proximity to customers perience higher levels of vacancy and accessibility for managers from during 2016 as supply continues to the affluent Northern and Western outstrip demand. Barring any exterNairobi suburbs. While developers are nal shocks, higher interest rates and starting to consider the sector anew, developers responding there is as yet no provInvestors, therefore, who do to market dynamics will, en example of occupiers their research and create the however, assist in rebalright product in the right locapaying the required rents tion, will be able to generate ancing the market in the for high-bay, well serviced healthy development profits medium term. Successin all commercial sectors. accommodation. Projects ful developments going are in the pipeline, howforward will respond to ever, which will transform occupiers’ growing deNairobi’s industrial landmand for quality. These scape: hundreds of acres will lease well and sell at a premium are being parcelled up and sold at to the growing number of investors Tatu City and Actis has embarked targeting the Nairobi market. on the development of the region’s first fully-serviced logistics and light Investors, therefore, who do their reindustrial park at Northlands on the search and create the right product in Eastern bypass. the right location, will be able to generate healthy development profits in Meanwhile the investment market all commercial sectors. Those who for quality stock is strengthening with have not done their groundwork, the establishment of the first REIT and however, may have sleepless nights the arrival of several SA investors seekas they struggle to find occupiers in ing Grade A assets. Although there the short-to-medium term. are few transactions and limited data,
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