Nairobi off-plan apartments returned 18% a year, HassConsult study finds

Buyers who committed to Nairobi apartments before completion earned average annual investment returns of 18.06% across the developments studied, according to a HassConsult report that compares Kenyan off-plan performance with eight international markets.

The report, titled International Investment Outperformance: The Kenyan Residential Property Market, examined eight Nairobi residential developments marketed between 2019 and 2023 and compared their performance with markets including the United States, Britain, France, Switzerland and Canada. It argues that Kenya's "sell-to-build" model, in which buyers pay deposits of 10% to 30% and then instalments linked to construction milestones, produces returns that conventional property price indexes fail to capture.

Across four developments purchased in 2019, one-bedroom apartments appreciated by an average of 47.25% by the time of sale, two-bedroom units gained 33.2% and three-bedroom apartments 25.9%, compared with an 18.66% rise across the wider completed-apartment market over the same period. Escada, on Rhapta Road in Westlands, recorded 78% appreciation on one-bedroom units.

Rental income added to the return. Across five completed off-plan developments bought in 2019 and 2020, unfurnished one-bedroom apartments generated annual rental yields of between 11% and 19%, averaging 14%, almost double Kenya's overall apartment rental yield of 7.28% recorded over 2019 to 2025.

The report cautions that the 18.06% figure should not be read as a guaranteed return or as the profit earned on a buyer's initial deposit, since actual returns depend on the amount paid, financing costs, taxes, maintenance and rental occupancy. It also says buyer defaults in Kenyan off-plan developments remained minimal after the pandemic, with buyers increasingly favouring developers with established track records and visible construction progress.