Cytonn report reveals towns with best returns on real estate
Real estate sector in Nakuru Town has recorded the lowest rental yields among selected cities and towns in Kenya, with an average rental yield of 6.1%. This is in comparison to Nyeri, Mombasa, Nairobi, Kisumu which recorded 8.6%, 8.4%, 8.1% and 7.8% respectively.,
Cytonn Investments says in its Real Estate Investment Opportunity Report that the real estate sector in Nakuru town recorded total returns of 14.9%. According to the report, mixed use developments, had the highest returns, recording average rental yields of 8.9%, retail, commercial office and residential themes recorded average rental yields of 5.8%, 5.4% and 4.2%.
”The performance is mainly bolstered by Positive Economic Growth attracting government institutions, private investors, and entrepreneurs to the county,” Cytonn’s Senior Manager, Regional Markets, Mr. Johnson Denge said,
He noted that devolution has opened up Nakuru town with positive demographics such as population which has been growing at an average of 3.1 percent per annum, compared to a Kenyan average of 2.6 percent p.a. Research Assistant, Cytonn Investments Mr. John Keya said that in recent years, the expansion of the Nakuru-Nairobi Highway, and upgrading of roads linking several suburbs in the Town has also opened up the town.
On the performance of various real estate themes in the report, Senior Research Analyst Ms. Nancy Murule, noted, “for the residential sector, the opportunity is in 3-bed apartments in both the high end and mid end segment in areas such as Milimani, Section 58 and Naka. The units, she added recorded an average rental yield of 5.0 percent and 5.5 percent respectively, higher than the market average of 4.2 percent as well as high-annualized uptakes of 22.9 percent and 39.7 percent respectively.