Zachary Ochuodho @zachuodho
Limuru and Karen regions were the best performing regions with a rental yield of 9.6 per cent and 9.4 per cent, respectively, a study by Cytonn Real Estate indicates.
The performance was attributed to high-end neighbourhoods for instance Karen, Runda, Rosslyn and Kitisuru which host individuals with high purchasing power and who are willing to pay a premium for class and amenities.
Traffic congestion along Mombasa Road and competition from informal real estate developments in Eastlands affected Mombasa Road and Eastlands – which were classified as the worst performing regions with a rental yield of 5.7 per cent and 5.4 per cent, the lowest in the market.
Cytonn Regional Markets senior manager Johnson Denge said the investment opportunity within the Nairobi Metropolitan in areas such as Limuru road, Karen, Upperhill and Kilimani recorded the highest rental yield returns of 9.7 per cent, 9.4 per cent, 8.7 per cent, and 8.6 per cent, respectively.
Speaking during the launch of the report of Cytonn Real Estate, Nairobi Metropolitan Area Mixed Use Development Report, Denge said the Municipal Utility Districts (MUDs) was a viable investment opportunity subject to the developer striking the right balance between the incorporated uses.
Cytonn Real Estate research analyst Juster Kendi said that office space and residential units in MUDs have higher rental yields at 8.2 per cent and 5.6 per cent compared to the market average at 7.9 per cent and five per cent mainly attributed to higher rents and prices charged due to amenities and facilities provided.