Apartment block rental prices in Kenya differ from location to location. The main factor that affects the rental price is location from CBD , Nairobi. CBD Nairobi is measured from the epicenter of Corner house , radiating all the way to the extents of the country in mombasa, Kisumu, Turkana, Marsabit.
From this epicentre, prices decrease the further away you move, with small variations as you approach cities eg Nakuru, Nyeri etc where the prices get new epicentres.
% CHANGE
Lets calculate the % change of rental price from an arbitrary plot in Kileleshwa compared to an arbitrary plot in Ongata Rongai. The Kileleshwa price per acre is kes 200,000,000. Price per m2=kes 50,000. An average 2 bedroomed house is say 80m2 in plinth area so land value in Kileleshwa will be kes 4m.
The Ongata Rongai land costs kes 10m for a 1/4 acre. Price per m2=kes 10,000,000/1000=kes 10,000.
The 2bedroomed house plinth area of 80m2 will cost kes kes 800,000 in land value.
The % change in land values will be 500%.
Rent differential.
The Kileleshwa 2 bedroomed house rental income is kes 60,000 per month. This will pay back the land value in 6 years.
The Ongata Rongai House rental income is kes 20,000 per month. This will pay back its land value in 3 years.
High Rise.
The ileleshwa apartment will need to be very many floors in design so as to be economically viable.
The Ongata Rongai house will pay its land value back faster than the Kileleshwa house assuming they are all built on the same levels.
Conclusion.
Land in Middle cost areas of Nairobi would give better returns for residential apartments compared to land in high end areas. This is on the assumption that construction costs and architectural designs will remain the same in both scenarios. Generally, construction costs for high end areas are higher than for middle end areas.
Architect Francis Gichuhi Kamau.
gichuhi@a4architet.com
0721410684
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