NAIROBI, Kenya, Feb 29 – Investors who own apartments in Ruaka town will have an annual return of 22.1 percent, according to a new research by Cytonn Investments.
The research indicates that house prices and rental rates have increased at an annual rate of 6.8 percent and 15.5 percent respectively over the last six months.
According to the report, three-bedroom apartments have the highest price appreciation at 17.9 percent as compared to 14.7 percent and 15.7 percent for one and two-bedroom apartments respectively.
“Two-bedroom apartments have the highest yields at 5.45 percent as compared to 1 and 2 bedroomed apartments at 4.6 percent and 5.2 percent respectively. They are thus the best option for investors seeking to let their property in the area,” the report states.
One-bedroom apartments have the highest price per square metre at Sh93,090 as compared to two and three bedroom apartments at Sh91, 307 and Sh84, 214 respectively.
Demand for housing has led to an increase in land and property prices in areas around Nairobi Metropolitan Region.
“Land in Ruaka is priced at Sh100 Million per acre and this is relatively expensive in comparison to other satellite towns such as Ngong, Athi River and Ruiru. Prime land with frontage to tarmac road is scarce in the town resulting to an increase in linear developments along Limuru road towards Ndenderu,” the report states.
Ruaka Town has the highest uptake of housing units among Nairobi’s Satellite towns according to the report.
The research indicates that Ruaka’s uptake is at 93 percent compared to an average of 73 percent for the other satellite towns.
According to the data from the Kenya National Bureau of Statistics (KNBS) on the 2009 Census, the population of the larger Karuri area stood at 129,000 from the 2009 which is a 41.7 percent increase compared to the 99 census.
It is projected that by 2025 the population will be 176,191 translating to an annual population growth of 1.97 percent.
Ruaka’s population is a mix of both local middle income earners as well as foreign residents, which is an attractive real estate investment satellite town.
The town is close to Nairobi and has two prime commercial retail developments within its vicinity – Two Rivers and the Rosslyn Riviera mall. Research by our Real Estate team shows that Ruaka developments deliver an average rental yield of 5.1 percent per annum and potential total returns of more than 21 percent per annum.