It’s on 3rd of august and the coronavirus is yet to disappear. Every sector in the country has been hit hard by the pandemic, some of the biggest companies in Kenya been forced to permanently close. In the real estate sector, things are not good either. In a recent report by Cytonn, the rate of rental yields has declined across all the sectors from 7.7% to 7.4% for retail, 7.8% to 7.3% for office and 5.2% to  5.1% for the residential sector.  These results were against those of the first quarter of the year, offices recording the highest drop.


According to the report, the land sector was doing better than any other sector as it recorded an overall annualized capital gain by 1.4%, characterized by the prices in the low rise residential areas having the highest growth by 3.8%. This is due to most people looking for affordable land.


 The report also pointed out that the current challenges being faced in the industry such as slow market uptake, disruption of the supply chain, down pressure of prices and constrained financing would continue to be experienced as long as the pandemic is active.

In the same report, the research analyst of the company noted that the residential sector managed to stay relatively stable as most of the sectors softened. “The residential sector remained relatively stable with most sectors softening in performance, albeit marginally. Dagoretti, Ridgeways, and Westlands recorded the highest annual price appreciation at 3.1, 3.0, and 1.6 per cent, respectively”.


Areas in the high end of Nairobi such as Karen, Westlands and Gigiri were recognised as the best performing office nodes in the H1’2020 with Gigiri recording an 8.9% rental yield,8.2% for Westlands and 8.3% for Karen. This good performance was linked to the superior location along with the availability of high-quality offices, allowing them to charge higher.


In the retail sector, Karen and Westlands took the lead with an average of 9.2% and 9.8% respectively.


Generally, the land sector had a positive outlook, the residential, retail and hospitality recorded a neutral outlook while office and listed real estate had a negative outlook.


Finally, the report stated that real estate performance is expected to improve as we near the end of the year 2020, hoping that the economic activities will have regained momentum.