Upper Hill Land Price Grow at Fastest Pace in a Decade as Office Over-Supply Diminishes

Land price indices for the second quarter of 2024 has seen prices in Nairobi going up by 1.8 percent as demand for land for commercial development picked up according to HassConsult.The growth in the quarter was higher compared to the 1.3 percent reported in the second quarter of the year, partly driven by a resurgent Upper hill where the cost of an acre grew by 3.9 percent, the fastest quarterly price jump in a decade for the area.Head of Development Consulting and Research at HassConsult Ms. Sakina Hassanali stated that the resurgence of land price in Upper hill, which posted its fastest quarterly gain since the fourth quarter of 2014 underpins the uptake of remaining current grade 'A' office space formerly oversupplied, as well as Upper Hills' recent positioning for successful residential real estate.'The average land in Upper Hill hit its peak of Sh560 million in June 2018, signaling room for valuation gains as demand for commercial and residential real estate in the area gains traction,' revealed H assanali in a press statement.In the satellite towns, the average price per acre rose by 2.2 percent, down from 3.03 percent in the first quarter as some of the price growth hotspots showed signs of cooling down.The increase in the cost of credit and that of building inputs has negatively affected real returns for developers, limiting the propensity to absorb higher land costs in areas with lower purchasing power.Hassanali cited Ngong and Ongata Rongai, which have had some of the fastest growing land prices over the last three years, were eclipsed by gains in Ruiru, Syokimau and Limuru in the quarter.Ongata Rongai, she disclosed, was the only one of Nairobi's 14 satellite towns to report a fall in land prices in the second quarter, at negative 2.6 percent.'Land pricing in Ongata Rongai and Ngong saw a reversal of fortunes in the last quarter, a signal that the bullish pricing in the previous year is starting to level out,' noted Hassanali.Source: Kenya News Agency