REAL ESTATE

Apartments in Westlands recorded highest yield in 2020

This was attributed to the proximity to business nodes, availability of amenities and ease of accessibility

In Summary
  • Kilimani was the second best performing node with average rental yields of 4.8 per cent.
  • The report noted that serviced apartments within the NMA recorded an average rental yield of 4.0 per cent in 2020, 3.6 per cent points lower than 2019.
An Apartment in Westlands.
An Apartment in Westlands.
Image: FILE

Apartments in Westlands and Parklands had the best performance recording an average rental yield of 6.1 per cent in 2020, 2.1 per cent points higher than the 4.0 per cent market average.

According to the Cytonn Nairobi Metropolitan Serviced Apartments 2020 report,this was attributed to the proximity to business nodes such as Kilimani and Nairobi CBD, availability of amenities such as shopping malls and ease of accessibility 

Kilimani was the second best performing node with average rental yields of 4.8 per cent compared to market average of 4.0 per cent.

 

This is however a decline of 4.7 per cent points attributed to 31.6 per cent decline in occupancy rates and 20.5 per cent correction in the monthly charges per square metre.

The report notes that serviced apartments within the Nairobi Metropolitan Area recorded an average rental yield of 4.0 per cent in 2020, 3.6 per cent points lower than the 7.6 per cent recorded in 2019.

This is attributed to declines in monthly charges per square metre and occupancies from Sh2,806 to Sh2,445 and from 79.4 per cent to 48.0, respectively.

The decline in performance is attributed to subdued demand for hospitality facilities and services due to the COVID-19 pandemic which saw the government ban all international flights and local flights into Mombasa and Nairobi, implement partial lockdown within the NMA among other restrictive measures that were aimed at curbing the spread of the virus.

Some serviced apartments have also been issuing discounts to attract and maintain clients amid a tough economic environment occasioned by reduced disposable income.

Thika Road recorded the lowest rental yield at 2.0 per cent, and this was attributed to the relatively low charge rates for apartments within the area, given its unpopularity, due to lack of modern and quality serviced apartments in the area, the significant distance from main commercial zones, in addition to security concerns as the area is not mapped within the UN Blue Zone