NAIROBI, Kenya, Nov 11 – Kilimani is the best performing mixed-use development node in Nairobi metropolitan area, as it serves a prime commercial and affluent neighbourhood hosting a large portion of Nairobi’s high-end and upper-middle-class population.
According to the Nairobi Metropolitan Area (NMA) Mixed-Use Developments (MUDs) Report 2019 by Cytonn Real Estate, Kilimani’s average rental yields were 9.1 percent with the retail and office spaces recording rental yields of 9.6 percent and 8.4 percent, respectively.
Limuru follows closely owing its proximity to neighbourhoods such as Runda, Rosslyn and Kitisuru which have occupants with higher purchasing power.
Mombasa Road and Eastlands were the worst performing areas recording rental yields of 5.7 percent and 5.5 percent, respectively attributed to the low rental charges as a result of competition from informal Mixed-Use Developments.
Overall, Mixed-Use Developments recorded a decline in performance, with a 0.1 year on year drop in average yields to 7.3 percent this year from 7.4 percent in 2018, attributed to a decline in effective demand and constrained consumer spending due to a tough financial environment.
The report focused on the performance of mixed-use developments based on rental yields, occupancy rates, as well as annual uptake, with the research conducted on eight nodes within the Nairobi Metropolitan Area (Westlands, Kilimani, Karen, Ngong Road, Thika Road, Kiambu and Limuru Road, Mombasa Road and Eastlands).