Kenya's Property Market Remains Resilient as Demand Shifts Towards Quality, Convenience and Institutional-Grade Assets
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Knight Frank Kenya's H1 2026 market update shows a resilient property market, with prime office occupancy rising 4.05% and prime residential sale prices up 6.2%.
Knight Frank Kenya has released its Kenya Market Update H1 2026, reporting a resilient real estate market in the first half of the year despite global uncertainty, with demand shifting towards quality, convenience and institutional-grade assets.
The report notes that Kenya's economy grew by 4.6% in 2025 and is projected to expand by 4.4% in 2026, continuing to outperform the Sub-Saharan African average. The construction sector rebounded by 6.8% in 2025, highlighting continued activity across the built environment.
Nairobi's prime office market recorded one of the clearest improvements, with prime office occupancy rising by 4.05% from 81.58% in December 2025 to 84.88% in June 2026, driven by continued absorption of existing prime office stock. A shortage of large, high-quality Grade A office space is increasingly influencing occupier decisions, with some large occupiers extending existing leases while others commit to upcoming developments.
The prime residential market continued to record price growth during H1 2026. Prime sale prices increased by 6.2%, while monthly rents rose by 0.73% compared with December 2025, largely attributed to a continued shortage of quality prime housing stock amid sustained demand. Buyer preferences are shifting towards gated communities, green spaces and lifestyle-focused developments, with emerging locations such as Tilisi and Limuru attracting interest.
Kenya's real estate capital markets continued to develop, with the launch of the US dollar-denominated TRIFIC I REIT, targeting USD 29.8 million to finance certified green real estate developments. Kenya had five operational REITs as of March 2026, with combined market capitalisation exceeding KES 30.3 billion. Tax reforms introduced during the period are expected to support the sector by reducing transaction costs for transferring qualifying property into REIT structures.
The report also highlights a 13.1% increase in international arrivals through JKIA and MIA to 506,622 passengers in Q1 2026, and continued development of Special Economic Zones and industrial parks supporting the decentralisation of industrial activity beyond Nairobi and Mombasa.