Mombasa, Mt Kenya regions lead in real estate

Cytonn Real Estate’s, Senior Research Analyst, Nancy Murule during the release of the 2018 retail report on August 3, 2018. [James Wanzala/Standard]

Mombasa and the Mt Kenya region are now the best areas for retail real estate development.

This is according to the latest report released on Monday by Cytonn Real Estate, the development affiliate of Cytonn Investments.

The 2018 Kenya retail sector report titled “Retail Sector Recovers in Key Urban Cities except Nairobi” attributed the two regions’ ranking to high retail space demand of 0.3 million and 0.2 million square feet, attractive yields of 8.3 per cent and 9.9 per cent, as well as occupancy rates of 96.3 per cent and 84.5 per cent respectively.

It focused on the performance of the real estate retail sector based on rental yields, occupancy rates, demand and supply in comparison to last year’s performance to gauge the trends.

The report was based on research conducted on eight retail nodes in Nairobi (Westlands, Kilimani, Karen, Ngong Road, Thika Road, Kiambu and Limuru Road, Mombasa Road and Eastlands), Nairobi Satellite towns and the key urban centres of Eldoret, Mombasa, Kisumu and the Mt Kenya region’s Nyeri, Meru and Nanyuki towns.

According to the report, there has been an increase in the supply of retail space, especially in Nairobi, where retail space supply increased by 4.8 per cent year-on-year from 6.2 million square feet last year to 6.5 million square feet this year based on malls in the pipeline.

Supply of formal retail space is expected to increase in Nairobi by a further 1.3 million square feet to 7.8 million square feet by 2020.

The key towns covered have a total mall space supply of 15.3 million square feet against a demand of 14.1 million square feet.