NAIROBI is projected to reap from short-term rentals as global demand for interim accommodation shows signs of growth.
According to the Knight Frank Global Cities Report 2016, Nairobi is among global cities that are well-positioned to gain from the growing popularity of short-let accommodation in serviced apartments.
The city should however formalise this class of rentals, instill professionalism and enhance its branding to fully benefit, the report suggests.
The complexities of operating serviced apartments and private short-term lets, the report points out, underscores the importance of branding. It further calls for uniformity in quality of service and booking systems.
The study says as the real estate sector grows globally, quality assurance for short-term accommodation will be a challenge. This is because future economic growth will be dominated by the emerging markets.
“The quality of serviced apartments in Kenya matches that of a hotel, but it has been done relatively informally to date,” the Knight Frank report says. “The next level will mean more professionalism and a branded type of offer.”
Multinationals, the report says, have become more cost-conscious when looking for short-term rentals after the financial crisis of 2008/9.
They are keen on cutting expenses and altering the nature of overseas assignments.
The companies are also employing younger generations who are more flexible in business and leisure travel.
The survey says firms are increasingly deploying people around the world for shorter periods.
They are however more conscious about costs and are relying on short-term assignments in serviced apartments rather than hotels.
According to the annual report, a combination of shortage in supply in established markets and a fluid regulatory landscape around the world favour cities that embrace flexibility of short-term rental models like serviced apartments.
“Those cities that can find a way through such complexities and embrace this new form of real estate stand to benefit from a sector that is set for strong growth,” Knight Frank says.
The Global Cities report explores the future of the built environment which is intended to help investors, occupiers and city planners in their future business strategy.
For investors and landlords, there are clear long-term rewards in the world of short-term rentals and flexible living, according to Knight Frank.
Assignment consultant ECA International has forecast that short-term assignments will grow to over a fifth of international relocations in the three years to 2017.