Kampala and Dar es Salaam warehouse rents out-yield Nairobi for a second year

Kampala and Dar es Salaam posted higher yields on prime warehouse rents than Nairobi in the first half of 2026, extending their dominance in investment returns over the Kenyan capital, according to an analysis of the industrial property segment by real estate firm Knight Frank.

The average yield on rent of a prime warehouse in Nairobi stood at 9.5 percent in the first half of the year, compared with 13 percent in Kampala and 10 percent in Dar es Salaam. The tracker shows the same ranking and the same yields as the first half of 2025, meaning Nairobi has trailed its regional rivals for two consecutive years.

The yields diverged despite relatively similar charges. Warehouse owners in Uganda demanded an average of Sh906.22 ($7) per square metre, against Sh776.76 ($6) in Nairobi and Sh647.30 ($5) in Dar es Salaam, with the rent per square metre in all three capitals unchanged from a year earlier.

Rental charges for prime warehouses in Nairobi have held steady year on year, lifted by demand from tightening supplies of Grade A facilities and the repositioning of logistics networks around the Kenyan capital and other key economic corridors. Continued investment in transport corridors, special economic zones and logistics infrastructure is expected to reinforce Kenya's position, the tracker said.

Demand for industrial warehousing in Uganda is driven by manufacturing, logistics, construction, mining and energy-related occupiers. Knight Frank said cold-chain warehousing remains the most undersupplied industrial sub-sector, reflecting demand from agriculture, pharmaceuticals and food distribution, while lease tenures are lengthening for strategically important occupiers, particularly oil and gas contractors securing long-term space ahead of sustained activity in Uganda's petroleum sector.