Kenya's real estate sector in 2024 exhibited notable growth expected to reach a value of $733.4 billion (Sh94.5 trillion) with the residential segment dominating and an anticipated market volume of $944.1 billion (Sh122 trillion) by 2029. This was driven by various factors across its sub-sectors, including interest rates, housing supply, and regional economic conditions. But what does 2025 hold? To break it down, CNBC Africa's Tabitha Muthoni spoke to Mwenda Thuranira, CEO of MySpace Properties.
Kenya's real estate sector in 2024 exhibited notable growth expected to reach a value of $733.4 billion with the residential segment dominating and an anticipated market volume of $944.1 billion by 2029. This was driven by various factors across its sub-sectors, including interest rates, housing supply, and regional economic conditions. But what does 2025 hold? To break it down, we are joined by Mwenda Thuranira, CEO of MySpace Properties. To begin our conversation, let us start by breaking down some of the key players that we saw in the real estate sector in 2024 and also some of the factors that could have contributed to their performance. the real estate sector in 2024 and also some of the key players that we saw in the real estate sector in 2024 and also some of the key players that we saw in the real estate sector in 2022. and we are hoping it comes even lower since housing is capital intensive. So with affordable mortgages, of course, many Kenyans will be able to own homes. Indeed, and interest rates there have really impacted the real estate sector in 2024. But let us look, Mwenda, at how the entry of new local and international developers, financials, and even retailers have impacted competition and overall market growth in the country. Yes, of course, when it comes to development, we have seen many foreigners interested in the real estate development in Kenya, real estate investment. And of course, one of the leading factors, one of the leading players in the market is the Chinese entering to the market. Of course, they are doing many affordable developments, big developments, which are affordable, and they have found a way of working with agents. I mean, now they respect the agents who bring business to them. And I mean, their way of doing business, they have really seen a change in the market, and affordability is the key factor. Indeed. Also, in the retail market, we have seen the entry of international players like Carrefour, who are really expanding. Neighbours, of course, with foreign investors, they're expanding. Right now, they are at one or nine stores countrywide. I mean, people like Chandarana and all these big retailers, they are looking for big, big space. And that's why we lead the way with My Town Malls, where we build malls for the retailers. Yes, Mwanda, that's quite a lot to look at in terms of the local and even international real estate property developers coming into play here, and also the financial aspect of it when it comes to financing the real estate sector. But Mwanda, let us break down some of the investment trends and opportunities that we are likely to see in 2025 in terms of the emerging investment hotspots in Kenya's real estate sector. Yes. Actually, within the peripheries of Nairobi, we have seen a lot of development areas like Rwaka, of course, due to the infrastructure which has been put up by the government. And now we have the railway. People can live all the way and work in Nairobi. And we have seen areas like Kikuyu, we've seen areas like Dika. Now, people are living all the way in Muranga because there's expressway, they can come all the way. Living in areas like Mulolongo, Kitengela, because of the expressway, I mean, it's very easy to come to commute to Nairobi. And of course, with more infrastructure and more bypasses, we'll see more development. Since you know, in Africa, it's development first, then infrastructure. So, with the road network, of course, it will open up more areas for development. And that's what we are looking at, especially mixed-use development, where people can live, work and play. And also, policy and economic considerations here will play a key role when it comes to the involvement of the real estate sector in 2025, Mwanda. I am keen on understanding, looking at the affordable housing program, how it's going to impact the market so far? Okay, of course, affordable housing is a thing, but all I can say is what affordable housing can do is a small bit of it, since the private developers can do way more than the government. So, on my hand, I would rather this handled by the private sector, since by the end of the day, private sector breaks the business of the day. And people are even more comfortable dealing with the private sectors than the government. So, going forward, of course, the need of houses is big in Kenya, especially in the urban areas. And even the government cannot build enough. And I always try to insist that the government should focus on building for the less fortunate, for the poor projects, where they can house the people who cannot afford, since if you say affordable housing, even if it's 500 Kenya shillings, few people cannot afford. So, the people who buy affordable housing, the people who can afford three, four million, five million, I mean, these are middle class and upper, but for the poor is where we have a big problem, especially the slums and stuff like that. So, my take is government should focus on building for the poor. Indeed, it leaves a lot to be desired there, but let us look at some of the key trends and policy shifts that you are likely to see in 2025 and also beyond that are also going to help navigate Kenya's evolving real estate sector, Moenda. Yes, of course, looking going forward to 2025 and beyond, you know, Africa is where is the next frontier. And as you know, globally, out of four people, one is African. And with the youth population of Africa, which will mean a third of the youth will come from Africa. So, and these people will need housing, will need more modern housing. Actually, they don't have as much means as the baby boomers, the NGNXs, since all they need is maybe one bedroom, one room they can operate from. They work from the house. I mean, the landscape is changing a little bit since they want like restaurants where they can meet up meetings and go back to their rooms. Service offices is a thing of the future. And also now with the technology, people don't need to be in need to be in offices as per say. But looking forward, of course, mixed use development will carry the day. Indeed. And let us shift gears a little bit and look at the Kenya National Bureau of Statistics 2023-2024 survey report. It states that about 47.1% of real estate firms in Kenya are not registered with any professional or regulatory body. From where you sit, Moenda, why do you think this is likely so? Of course, if you look at it, the real estate market in Kenya and in most parts of Africa is not regularized. It's not well structured. So with the structuring of the market, that will be needed. Since right now people do things in a local way, as we see in Kenya, in a Kenyan way. But now we need to professionalize this, put structures in place. For example, like 90% of real estate players are not registered. Only 10% or less is registered. So we need to start by having professionals, having trainings for real estate. And you know, you can't have professionals who are not trained. So with proper training, then the real estate sector will be spurred even further. And people, especially the foreigners, will have enough trust to invest in these markets. Indeed. And Moenda, we leave that conversation there. Thank you so much for those great insights.
Theme: Exploring the growth prospects and market outlook of Kenya's real estate sector in 2025
Kenya's real estate sector has been on a trajectory of notable growth, with expectations to reach a value of $733.4 billion by 2024 and an anticipated market volume of $944.1 billion by 2029. This growth has been driven by a combination of factors, including interest rates, housing supply, and regional economic conditions. To delve deeper into what the year 2025 holds for the real estate sector, CNBC Africa's Tabitha Muthoni sat down with Mwenda Thuranira, CEO of MySpace Properties. Thuranira highlighted several key insights into the real estate market in Kenya, shedding light on the key players, investment trends, policy considerations, and potential challenges that lie ahead. One of the critical themes that emerged from the interview was the increasing interest from both local and international developers, financials, and retailers in the Kenyan real estate market. Thuranira noted the entry of Chinese developers who are spearheading affordable housing projects and working closely with local agents to drive market growth. Additionally, international retailers like Carrefour have been expanding their footprint in the country, signaling a growing demand for commercial real estate spaces. Thuranira also discussed the emerging investment hotspots in Kenya, highlighting areas like Rwaka, Kikuyu, and Dika as development hubs driven by improved infrastructure and accessibility to major cities like Nairobi. The conversation also touched on policy considerations, particularly the affordable housing program and the role of the private sector in meeting the housing needs of Kenyans. Thuranira emphasized the importance of focusing on housing solutions for the less fortunate and underserved communities, suggesting that private developers could play a significant role in bridging the gap in affordable housing. Looking ahead to 2025 and beyond, Thuranira underscored the evolving landscape of the real estate sector, pointing to the rise of mixed-use developments and the changing preferences of the younger population, who seek modern and flexible living spaces. He also discussed the need for professionalization and regulation within the real estate market, highlighting the low registration rates of real estate firms with professional bodies and the importance of training and structuring the industry for sustainable growth. As Kenya's real estate sector continues to evolve, Thuranira's insights offer a glimpse into the opportunities and challenges that lie ahead, shaping the future of the country's property market.
"With proper training, then the real estate sector will be spurred even further, and people, especially the foreigners, will have enough trust to invest in these markets."
['Kenya real estate', 'property market', '2025 growth prospects', 'investment trends', 'affordable housing program', 'mixed-use development', 'professionalization']