A recent research by emerging markets platform Frontera shows that Nairobi is among six of the most promising cities for commercial real estate in frontier and emerging markets.
The report identified six upcoming commercial markets benefitting from this surge in real estate investment activity with particularly strong growth potential in the near future.
The major drivers of this trend are international investors, with cross border activity expected to account for 50% or $500 billion of total investment activity by 2020. Meanwhile, a ballooning middle class is spurring urbanization in many upcoming cities globally creating strong domestic demand alongside the capital flowing in from across borders.
Nairobi is becoming a focal point for MNCs, regional companies and start-ups that are looking to tap into the prolific East African markets. As per data revealed by Frontera research, Nairobi’s rental index has appreciated by 89% during 2007-2016. Driven by rising demand from manufacturing, banking, education, mining and government enterprises, the market’s ascent has plenty of momentum to continue.
Nairobi will also benefit immensely from higher investments in infrastructure. It is building a vast IT corridor named Konza Techno City that will act as a hub for global IT and high-tech giants. By 2020, the project is expected to generate 100,000 new jobs.
A booming economy is expected to translate to rising income and evolving consumer preferences, thereby leading to heightened demand for quality retail. Similar to other African cities, Nairobi is still in nascent stages for organized retail.
The other five cities in the list include, Warsaw is the capital and largest city of Poland, Prague; the capital city of the Czech Republic, Hanoi, the capital of Vietnam, Ho Chi Minh City (commonly known as Saigon) is a city in southern Vietnam, Bangkok; the capital and most populous city of the Kingdom of Thailand