The demand for retail tenancy in Kenya is recovering quickly
Aviation Industry Corporation of China (Avic) is set to construct four-bedroom luxury apartments in Nairobi’s Kileleshwa estate. The residential development, which will be called Avic Park, is expected to be completed within 24 months with the total cost of the housing project at Sh4 billion. The apartments will be contending with other luxury flats in other African countries that offer the greatest opportunities in real estate intended to beat the records of other luxury apartments.
“This project is for the construction of a block of apartments with three basement floors and 11 typical upper floors having a total of 110 apartment units, associated amenities and facilities,” said the license by Nema. Within the same development, Avic will also construct two- and three-bedroom units each going for Sh27 million and Sh38 million to further increase its chances in a city that has seen many property developments in the recent years. For Avic, this Kileleshwa-based project will be the smallest publicly announced investment in its property portfolio.
Real estate remains a booming opportunity for Africa-focused investors for good reasons. .The growth of Africa’s cities creates a demand for increased volumes of high-quality commercial and residential real estate. Kenya is the 8th most expensive retail space offering at US$48/m2 per month in Nairobi. However the east African country has slowed the demand from potential retail tenants as the local economy flushes out the internal issues. Office space prices moderated in the past 12 months in Kenya as business has been hesitant to expand until the government addresses its suddenly re-emerging terrorism concern. This recent development raises the hope that Kenya is gradually returning to its status as an attractive retail space with a growing industrial property market.
The rise of the urban middle class drives retail property development, particularly as modern shopping malls spread across the continent. A growing number of multinational companies are searching for office space and accommodation in emerging African cities. The rise of regional tech hubs and an expanding oil and gas sector creates job opportunity with no place to house the employees.
Villa Care, the agents in charge of the sale of these apartments, say that Avic is putting up the high-end apartments as a market response to demand for luxury apartments. “Due to the recent increase in foreign direct investment (FDI) and the entry of multinationals into various sectors of the East African economy, there is a clear need for both high quality residential and commercial real estate in the region’s capital, Nairobi,” said Villa Care in a statement.
In July, Avic announced that it was investing Sh20 billion to construct a 43-storey office block, apartment blocks, and a five-star hotel on a 7.5 acre plot in Westlands, Nairobi.
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