Land in satellite towns new investment frontier as developers monopolise city suburbs

Transcription

1 LAND PRICE Land in satellite towns new investment frontier as developers monopolise city suburbs Land value in Nairobi's 18-suburbs dropped marginally at 0.2 per cent between January and March attributed to a shift into satellite towns by land investors The highest fall in land value was experienced in Eastleigh at 7.5 per cent followed by Ridgeways, Kileleshwa and Nyari at 2.4 per cent, 2.2 per cent and 2.0 per cent respectively in the three months to March while Donholm recorded the highest increase in land price at 9.3 per cent In contrast land prices in Nairobi's 14 satellite suburbs rose by 1.1 per cent in the first quarter of Land in Kitengela rose by the 4.4 per cent in the first quarter of, making it the best performing satellite suburb Land continues to outperform other commodities returning nine times that of Gold and thirteen times that of cattle over the past 7 years Investment in land also runs ahead of annualized stocks and bond returns, rendering it the most stable investment option with the highest yields over 7 years Land Index Highlights: The Hass Composite Land Index, Nairobi Suburbs Quarter Annual Change From 2007 Nairobi-18 Index Results -0.2% 4.1% 5.72 Fold Suburb with Highest Quarterly Increase in Land Price Donholm ( +9.3% over last quarter) Suburb with Highest Annual Increase in Land Price Donholm ( +26.1% over last year) Suburb with Lowest Quarterly Increase in Land Price Eastleigh( -7.5% over last quarter) Suburb with Lowest Annual Increase in Land Price Eastleigh ( -12.2% over last year) The Hass Composite Land Index, Nairobi Satellite Towns Quarter Annual Change From 2007 Nairobi Satellite-14 Index Results Suburb with Highest Quarterly Increase in Land Price Suburb with Highest Annual Increase in Land Price Suburb with Lowest Quarterly Increase in Land Price Suburb with Lowest Annual Increase in Land Price 1.1% 6.8% Kitengela (+4.4% over last quarter) Kiserian (+23% over last year) Mlolongo (-1.6% over last quarter) Mlolongo (-3.8% over last year) 6.47 Fold

2 LAND PRICE Nairobi, April 18th, : HassConsult today unveiled land price trends for the first quarter of, showing a marginal fall in asking prices of land in Nairobi's main suburbs while those its satellite towns continued to accelerate. The average fall of 0.2 per cent comes as land speculation moves to Nairobi's periphery with Nairobi's main suburbs now primarily a developer market. Land acquisitions in Nairobi now consist primarily of developers keen to build high-density residential, commercial and retail properties that yield development profits. These profits are secured by the sustained demand for property by both home owners and investors alike, said Ms. Sakina Hassanali, Head of Research and Marketing at HassConsult. Some suburbs in Nairobi however, bucked the trend recording sharp price rises. Donholm's land price leap of 9.3 per cent in the quarter highlighted the role of infrastructure upgrades on land prices, as developers move to take advantage of the areas improved accessibility, she said. At the same time, land prices in Nairobi's 14 satellite towns increased by 1.1 per cent over the quarter as investment in infrastructure by both the national and county governments and the relatively low price of land in satellite towns presents opportunities for investors looking to benefit from land price appreciation both in the short term and over the long term. Land in Kitengela led the pack at an increase of 4.4 per cent over the period, no doubt a response to the suburbs increasing institutional investments. Athi River, Ruaka and Ruiru are some of the satellite cities beginning to attract large scale residential and retail development. This development shift into Nairobi's periphery is expected to accelerate as infrastructure is rolled out preparing these towns to be the new frontier for land price gains. said Ms Sakina Hassanali. For more information, please contact: Sakina Hassanali, Head of Research & Marketing

3 LAND PRICE Nairobi Suburbs Land Index Quarter Annual Change From 2007 Average Value Per Acre (KShs) 25 Percentile 75 Percentile Donholm 9.3 % 26.1 % ,200,000 24,000,000 92,000,000 Eastleigh -7.5 % % ,900, ,000, ,000,000 Gigiri Karen Kileleshwa Kilimani Kitisuru Langata Lavington Loresho 0.5 % 9.5 % ,400,000 60,000, ,000,000 Muthaiga -0.4 % 0.5 % ,100,000 67,000, ,000,000 Nyari Parklands Ridgeways Runda Spring Valley Upperhill Westlands -1.9 % 5.9 % ,300, ,000, ,600, % 6.8 % ,700,000 44,000,000 60,000, % -0.4 % ,300, ,000, ,000, % 9.0 % ,700, ,000, ,800, % 17.3 % ,100,000 52,000, ,000, % 2.9 % ,800,000 23,600,000 60,000, % 0.5 % ,100, ,000, ,000, % -2.4 % ,600,000 90,000, ,000, % -1.0 % ,200, ,000, ,000, % -4.6 % ,900,000 52,000,000 70,000, % 15.0 % ,100,000 60,000,000 92,000, % -0.5 % ,300, ,000, ,000, % 5.5 % ,300, ,000, ,000, % 3.1 % ,100, ,000, ,000,000 Nairobi Satellite Town Land Index Quarter Annual Change From 2007 Average Value Per Acre (KShs) 25 Percentile 75 Percentile Athi River Juja Kiambu Kiserian Kitengela Limuru Mlolongo Ngong Ongata Rongai Ruaka Ruiru Syokimau Thika Tigoni -1.0 % 2.5 % ,300,000 3,600,000 16,000, % 11.8 % ,300,000 2,800,000 9,000, % 11.8 % ,800,000 14,000,000 50,000, % 23.0 % ,300,000 2,500,000 9,600, % 21.7 % ,000,000 3,800,000 12,400, % 5.7 % ,700,000 6,800,000 20,800, % -3.8 % ,800,000 16,000,000 40,000, % 5.1 % ,500,000 10,000,000 20,000, % 1.5 % ,900,000 6,000,000 21,200, % 10.2 % ,600,000 34,600,000 80,000, % 5.5 % ,400,000 5,600,000 20,800, % 1.1 % ,200,000 11,200,000 23,000, % 2.4 % ,600,000 5,600,000 20,000, % 10.0 % ,700,000 17,500,000 21,000,000 *Price Values rounded to nearest Kshs. 100,000

4 LAND PRICE Land Index Heat Maps Nairobi-18 Suburbs Change in Prices Since Nairobi-14 Satellite Towns Change in Prices Since

5 LAND PRICE Index December 2007 = Hass Land Composite Index Nairobi Suburbs -18 The Nairobi Suburbs-18 Land Index is representative of Land for Sale in Nairobi covering 18 highest activity suburbs Land values have increased by 5.72 fold since December 2007 Average Asking Price in KSh.s 200,000, ,000, ,000, ,000, ,000, ,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 The annual average is representative of the average price of land for sale in Nairobi covering 18 highest activity suburbs The average value for land has gone from 30.3 million in December 2007 to million in March Q1 Q1 Average Land Price Nairobi Suburbs % 3.6% 4.1% 3.8% 3.0% 8.9% 4.7% 2.8% 2.7% 3.2% 3.1% 3.5% 5.3% Supply of Advertised Land Nairobi Suburbs % 6.4% 11.2% 18.1% 5.1% Donholm Eastleigh Gigiri Karen Kileleshwa Kilimani Kitisuru Langata Lavington Loresho Muthaiga Nyari Parklands Ridgeways Runda Spring Valley Upperhill Westlands The Mix is a measure of the percentage that each suburb represents in the market for 18 Nairobi suburbs Land in Donholm took up 3.2% of the market, Eastleigh took up 3.1%, Gigiri 3.5%, Karen 18.1%, Kileleshwa 5.1% Kilimani 11.2%, Kitisuru 6.4%, Langata 6.3%, Lavington 4.7%, Loresho 3.0%, Muthaiga 3.9%, Nyari 3.8%, Parklands 4.1%, Ridgeways 3.6%, Runda 8.9%, Spring Valley 5.3%, Upperhill 2.8% and Westlands 2.7% respectively

6 LAND PRICE Index December 2009 = Hass Land Composite Index Nairobi Satellite -14 The Nairobi Satellite-14 Land Index is representative of Land for Sale in 14 Satellite towns outside Nairobi Land values have increased by 6.47 fold since December 2007 Average Asking Price in KSh.s Q1 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Average Land Price Nairobi Satellite -14 The annual average is representative of the average price of land for sale outside Nairobi covering 14 highest activity Satellite towns The average value for land has gone from 2.4 million in December 2007 to 15.8 million in March Q1 4.7% 18.0% 2.6% 11.0% 7.4% Supply of Advertised Land Nairobi Satellite % 9.3% 8.8% 5.0% 5.3% 11.7% 3.9% 6.7% 2.3% Athi River Juja Kiambu Kiserian Kitengela Limuru Mlolongo Ngong Ongata Rongai Ruaka Ruiru Syokimau Thika Tigoni The Mix is a measure of the percentage that each town represents in the market for the Nairobi 14 Satellite towns Land in Athi River took up 9.3% of the market, Juja took up 8.8%, Kiambu 5.0%, Kiserian 5.3%, Kitengela 11.7% Limuru 3.9%, Mlolongo 2.3%, Ngong 6.7%, Ongata Rongai 7.4%, Ruaka 2.6%, Ruiru 18.0%, Syokimau 4.7%, Thika 11.0% and Tigoni 3.4% respectively.

7 LAND PRICE Land as an Investment Land Performance vs Commodities The Hass Land Composite Index, Nairobi Satellite-14 index value was 647 outperforming Nairobi Suburbs-18 which had an index value of 572, compared to Cattle which had a value of 139.4, Gold and Crude Oil worst performing with only 41.8 index value. 0.0 Q1 Index Dec 2007 = 100 Nairobi Suburbs-18 Nairobi Satellite-14 Gold Crude Oil Live Cattle (CME) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Land Performance vs Other Asset Classes Q1 Ksh. 1 million invested at the end of 2007 would have been worth KSh. 6.47m if invested in land in Nairobi Satellite-14, KSh. 5.72m if invested in land in Nairobi Suburb-18, KSh. 2.26m if invested in property (The Hass Sales Composite Index, All Properties), Ksh. 2.03m if invested in bonds and KSh. 1.14m if invested in savings. Nairobi Suburbs-18 Nairobi Satellite-14 Property Equities Bonds Inflation Savings