Ruaka is the most attractive area for developers of apartment blocks among Nairobi’s satellite towns, with uptake of the units at nearly 100 per cent.
A real estate report by investment firm Cytonn says that the area remains attractive owing to its closeness to Nairobi’s central business district (CBD) and good infrastructure.
Cytonn says that there is still a huge market for housing in the low- and middle-income segments, presenting opportunities for developers in satellite towns like Ruaka, Ngong and Ongata Rongai.
“With a vast majority of residents in this area (Ruaka) being within the middle to lower-middle class, uptake of housing units is expected to remain high,” the report says.
“Our research indicates that Ruaka area has an average uptake of 93.5 per cent in residential apartments. Attractiveness of residential property investments in this area is mainly due to its close proximity to the CBD and infrastructural developments such as the Northern Bypass,” it adds.
Among the other towns, Ngong and Thindigua rank favourably in terms of apartment uptake, with 78 and 77 per cent respectively.
Others are Ruai and Kikuyu (73 per cent), Kitengela and Athi River (71 per cent) and Ongata Rongai (70 per cent).
The satellite towns have over the last 15 years become increasingly developed due to the pressure exerted by a growing middle class.
Kenya has an annual housing deficit of about 200,000, with Nairobi, the capital, accounting for a good chunk of this.
As land prices soared in Nairobi, developers sought to build in the satellite towns, where land was relatively cheaper.
The Cytonn report lists Pan-African mortgage lender Shelter Afrique and Safaricom Investments Cooperative as some of those interested in Ruaka.
Shelter Afrique is seeking partnerships with developers to build affordable houses for the middle- and low-income housing segments. The company is funding Glenwoods Apartments, a 440-unit housing project in Ruaka.
Safaricom Investments Cooperative has also ventured into this market and has started the second phase of its Ruaka Ridge development within the same locality.
“We expect the overall attractiveness of Ruaka, as well as other satellite towns, to continue on an upward trend as land prices remain relatively lower in comparison to land prices in Nairobi suburbs such as Kilimani, Kileleshwa, Westlands and Parklands,” the report says.
“Increased infrastructural developments are also making these areas accessible and hence boost the demand for housing units.”
The Cytonn report comes even as other market indexes show that rents, especially for apartments targeting the upper-middle to high-income earners, might be stagnating or going down.
Real estate firm Hass Consult said that in the three months to December, the asking rents for apartments fell by 2.3 per cent.
There has been a surge in the number of new apartments, which has seen the the supply increase, impacting on the rents.
Apartments continue to be favoured by those working in the city due to their affordability and convenience, with most located close to the roads.