What has triggered the land rush and epidemic of land grabs around Nairobi? The simple answer: money, and lots of it. A new property survey released Thursday in Nairobi gives prices per acre of key areas. It makes it clear why demand for prime land by private developers, institutional investors and others less savoury has pushed prices to astronomical levels, far beyond the reach of individual buyers.
The first Hass Nairobi Land Price Index shows the city’s prime spots have appreciated by 537 per cent over seven years. HassConsult Real Estate is a city real estate sales and analysis firm. Here’s the breakdown per acre, from most to least ‘expensive’ in potential commercial areas.
*Upperhill Sh470million (tops)
* Kilimani Sh371 million
* Westlands: Sh361.7 million
*Kileleshwa Sh250 million
*Lavington: Sh202 million
*Spring Valley Sh173 million
Per acre in high-end residential areas:
*Runda: Sh67 million (tops)
*Karen Sh45 million
*Lang’ata Sh45 million
“Land prices in the last four years have risen at twice the rate of cattle and four times the rate of property while oil and gold prices have fallen over the same period,” said Sakina Hassanali, head of research and marketing for HassConsult Real Estate. “The average price per acre was a little over Sh30 million in 2007, but is more than Sh170 million today,” she said during the release of the report.
Hassanali said the land index compared more than 10,000 land records to document the pricing tends in the nine suburbs where development has been intense. Individuals cannot afford prime land at the current cost and only a few of those with the money would purchase land at that cost just to put up a residence, she said.
Most corporates, including banks, UN bodies, multinationals, and hotel chains, are also seeking new addresses outside the central business district to avoid the congestion and high rents, thus pushing up demand in convenient areas. According to the report, an investment of Sh32 million in an acre of urban land in 2007 had multiplied to Sh173.7 million in 2014. The same amount would have translated to only Sh64.2 million if invested in property, Sh57.8 million in bonds and Sh29.2 million in equities.