The East African real estate sector is expected to receive a boost in capital investment from international real estate funds and institutional investors, according to Niyi Adeleye, the Head of African Real Estate at Stanbic Bank. He notes that the region’s dynamic macroeconomic environment offers opportunities for investors to diversify their portfolios and seek out niche markets.
The Light Industrial and Warehousing sector is also showing great potential for investors to acquire new assets and increase returns in the short term. Donald Borthwick, of the London-listed Grit Real Estate Income Group, notes that the region’s A-grade industrial real estate is still in its infancy but has shown outstanding performance potential and the ability to weather any downturns.
The retail, student housing, and industrial sub-segments in the region are also more mature than those in other parts of the continent, except for South Africa. Nairobi’s position as the hub of East Africa has also enhanced occupier demand, with a 9% increase in the number of registered businesses in Q1 2023, resulting in 37,176 registrations. Tilda Mwai, a Research Associate at Estate Intel, notes that key occupiers in the financial services and tech sectors continue to drive demand in the commercial sector, indicating cautious optimism on traditional real estate sectors.
Property analysts remain cautiously optimistic about the middle-income residential, student housing, corporate accommodation, data centers, performing retail, and office sectors. All of these sectors have the potential to provide investment opportunities for international real estate funds and institutional investors looking to capitalize on the region’s dynamic macroeconomic environment and growing sub-segments.