Real estate investment is a preferred choice for Kenya’s richest individuals who consider land and property as their main investment over other asset classes. A report by Standard Chartered Bank showed that 28 per cent of people preferred investing inland, while 27 per cent preferred property as an investment plan. A Wealth Expectancy Report revealed that Kenyan wealth creators are more likely to fund or start a business than an individual in any other market.
A Wealth Report by property consultancy firm Knight Frank and Stanbic Bank indicated that close to a third of Kenya’s high-net-worth individuals (HNWIs) have apportioned their wealth to properties. The other 20 per cent tied their wealth to personal businesses while other venture options like bonds, equities, precious metals and cash accounted for 18 per cent of their total investments. A study by realtor HassConsult revealed that returns from land over the past decade surpassed other asset classes like government equities and bonds.
The property boom has provided the real estate in Kenya with the highest returns in the real estate sector. The investments in construction and buying of land have increased the price of land and property to one of the highest in Africa. The property boom was also driven by Kenya’s growing middle class who have been outpriced in owning property in the capital. For instance, the Hass index showed land prices within Kenya’s capital increased to 63.8 per cent since 2017 while satellite towns like Kiambu and Kajiado increased to 89.4 per cent over the same period. Real estate has remained a lucrative business with 24 per cent of the world’s richest individuals putting their money in property.
Kenya’s rich individuals grew by 8 per cent from 2015’s total of 8,500 to 9,400 in 2016. According to Knight Frank’s global wealth report, Kenya has 42 individuals who are worth more than Sh1 billion ($ 10 million). The reports also indicate that 9,600 Kenyans belong to an exclusive class of the ultra-wealthy. Kenya is ranked fourth in Africa with 356 billionaires living in Kenya Last year. South Africa tops the rank in the continent with 2,169 such individuals followed by Egypt (932) and Nigeria (531). Kenyans wealth increased by 64 per cent over the past decade. Globally, the US has the highest number of wealthy people in the world at 240,575 with China ranked second with 61,587 individuals, Germany third (23,078) and France fourth (18,776). The number of high-net-worth individuals grew by 6 per cent across the world.
The surveys say that 4 per cent of the global wealthy individuals from Germany, Uk, Canada, UAE, South Africa and Nigeria are more likely to get into Kenya’s commercial property sector. However, the study reveals that 4 per cent of the global HNWI are seeking to own property in Kenya. Kenya’s wealthy are also interested in healthcare and retirement property for commercial real estate investment in 2020.