NAIROBI (Xinhua) --
The dozens of suburbs bordering Nairobi, Kenya’s
capital, have experienced rapid real estate development in the
last a few years, but this growth is now hurting property
developers as rental yields fall.
The towns that
include Rongai, Kitengela, Ruaka, Zambezi, Athi River, Mlolongo,
Juja and Kiambu have come to be known as “Nairobi’s bedroom”
because many people who work in the capital live there after
relocating in search of low rent and serenity.
Over the years,
population in all the suburbs has surged, becoming an impetus
for developers to invest in high-rise residential buildings to
Some of the
buildings go as high as seven floors, hosting up to 50
have now become a major undoing for the landlords as rents for
two and three bedrooms fall in some suburbs and in others
Kitengela is one of
the suburbs where rents for the houses have declined as
landlords try to lure tenants.
A three-bedroom unit
in the suburb is currently being rented out for as low as 200
U.S. dollars a month down from at least 250 dollars, thanks to
the saturation of houses.
On the other hand,
two-bedroom units in the suburb are going from as low as 120
dollars to 150 dollars, down from an average of 180 dollars a
“There are so many
houses around that it has become difficult to raise the rent,”
Samson Muigai, a housing agent in Kitengela, said Thursday. He
noted that developers have built so many houses that it has
become a tenants’ market.
“Tenants are spoilt
for choice and in some instances are dictating what they want to
pay, you have no choice but to agree,” he said.
“I have seven
three-and-two-bedroom units in various apartments that the
owners are charging 250 dollars to 200 dollars respectively as
rent. Eight months later they are yet to get tenants despite
numerous enquiries,” he added.
In Ruai and Athi
River, and the other suburbs, the same scenario replicates with
some landlords reducing rent while others offering incentives
like free garbage collection to lure tenants.
“I had to cut rent
from 140 dollars to 125 dollars to maintain my tenants but still
two of the six two-bedroom houses remain vacant after the
previous occupants relocated to a new apartment offering same
rates,” said John Kuta, a banker and landlord in Ruai.
Kuta noted he built
his two-storey block of rental units some five years ago, and
then, the number of houses being constructed were not many, but
in the last two years, a lot has changed as developers go for
high rise buildings.
“I have seen Ruai
being turned into high-rise residential estate, with many
developers coming in but the market is now saturated and we are
feeling the pinch,” he said.
The development has
hit also owners of bungalows and maisonettes harder, as people
shun the houses due to high rent. Also affected are housing
agents whose income has declined or in some cases dried up due
to low demand.
A bungalow in
estates like Mlolongo and Rongai go for at least 300 dollars a
month while four-bedroom maisonettes are being rented out for at
least 400 dollars.
house owners mostly who have two rooms and one-room houses are
not feeling the pinch as rent at the level rises.
Rent at the segment
has accelerated faster in the last one-year, according to the
Kenya National Bureau of Statistics, as demand outpaces supply
at the level mainly due to developers shunning building the
A single room goes
at an average of 50 U.S. dollars, but charges range from 40
dollars to 70 dollars, depending on the residential areas.
“Developers made the
dirty bed themselves, therefore, they must lie on it,” said
Antony Kuyo, a consultant with Avent Properties in Nairobi, in
reference to the low rent.
concentrated on building two-and-three-bedroom houses in search
of higher rent but this is now working against them,” he said.
He noted that thanks
to the saturation of houses due to the many apartments, the
rental market is now correcting itself as some landlords were
charging higher rents that have placed them out of the market.