- Property firm Knight Frank has ranked Nairobi City as the leading destination for real estate investments in Africa
- In its Prime Global Cities Index –Q1 2022 report, Knight Frank ranked Nairobi city 32 out of the 45 sampled cities, with a capital appreciation of 1.3% quarter on quarter and 3.5% year on year
- Increased demand for housing resulting from several factors, including a growing middle-income class, drove performance
- Dubai recorded the highest year on year capital appreciation at 58.9%, with a quarter on quarter appreciation of 6.8%
Nairobi City has been named the leading destination for real estate investments in Africa.
Source: UGC
In its latest report, Knight Frank highlighted the performance of prime residential cities across the globe based on capital appreciation by ranking the performance of 45 cities globally.
According to the Prime Global Cities Index –Q1 2022 report, Nairobi city ranked 32 out of the sampled cities, with a capital appreciation of 1.3% quarter on quarter and 3.5% year on year.
The increase in performance was driven by increased demand for housing resulting from several factors: a growing middle-income class and the recognition of Nairobi as a regional hub, thus promoting investments. The performance was also due to Kenya’s high urbanisation growth rate, currently at 4.0%, compared to the world’s 1.8%.
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Increased investor appetite
Commenting on the report, analysts from Cytonn Investments said they expect properties in Nairobi to record further capital appreciations.
“We expect more properties in the city to record capital appreciations, which trickles down to the overall performance of the residential sector coupled with increased investor appetite in the sector,” Cytonn said.
Overall, the report found that the average selling prices for houses in the sampled prime cities globally recorded a capital appreciation of 2.2% quarter on quarter and 9.4% year on year.
Knight Frank attributed the performance to high demand for decent houses across the globe, resulting from increasing population and urbanisation growth rates, infrastructure developments which are primarily concentrated in the urban areas, and adequate amenities enhancing investments.
Dubai, Miami ranked top globally
Dubai recorded the highest year on year capital appreciation at 58.9%, with a quarter on quarter appreciation of 6.8%. This was driven by several factors, including its world-class infrastructure developments driving significant investments in the city, such as Dubai Highway and Dubai Water Canal. Dubai was also ranked first due to its recognition as a financial hub globally, thus attracting high-end investments.
Other cities ranked favourably include Miami in the second position, Toronto in third, San Francisco in fourth place and Los Angeles in fifth place.
On the other hand, Jakarta ranked last among the sampled prime cities with a year on year price correction of 4.7% and no price quarter on quarter change, attributed to declining demand for housing units in the city that results from challenges such as floods and congestion.
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Source: TUKO.co.ke