Nairobi has maintained its position among the global cities with the hottest high-end property markets boosted by an investor flight from troubled European economies.
An international survey by Knight Frank, a real estate consultancy firm, has ranked Nairobi as Africaâ€™s highest growth market for investors in high-end property development.
The Knight Frank Prime Global Cities Index for the second quarter of 2012 shows that between June 2011 and June 2012, Nairobiâ€™s high-end property market recorded a 21.8 per cent price growth, the highest by an African city.
Cape Town is the only other African city that appeared on the list with a 4.1 per cent growth rate over the period, while Bangkok topped the list of 27 cities that were sampled in the survey with a 28.8 per cent increase.
Jakarta, which recorded a 28.5 per cent price increase in the period, came in second while Nairobi took the third overall position.
The report says the growth recorded by cities such as Bangkok, Jakarta and Nairobi can in part be attributed to the Eurozone debt crisis.
â€œBuyers and investors are no longer just concentrating on those cities that attract a high level of international demand and a good quality of life but the latest results suggest they are increasingly seeking prime property in those cities best sheltered from the EU debt debacle,â€ says the report.
Nairobi is a visible spot on the global map of cities where investors can get high returns on the property markets.
An international survey of 71 cities done by Knight Frank last year showed Nairobi had the highest growth in property prices in 2011, followed by Kenyaâ€™s coastal cities.
Nairobi recorded a 25 per cent increase in property prices last year while the coastal property market recorded increases of 20 per cent.
The Knight Frank survey said Kenyaâ€™s high-end market was vibrant in the first half of the year, boosted by demand from the expatriate community.
â€œThe greatest demand and consequently highest rents were experienced in the northern suburbs within close proximity to UNEP, the US Embassy, diplomatic missions and high-end NGOs,â€ said the survey.
The survey, focusing on local market, said that town houses in this category fetch rents of between $3,500 (Sh298,000) and $4,400 (Sh375,000) per month and luxury apartments attract rents of between $2,940 (Sh250,000) and $ 3,530 (Sh301,000) per month.
Centum Investments, a Nairobi Securities Exchange listed firm, has sought to capitalise on the real estate boom created by the expatriate community through its Two Rivers project, the firmâ€™s first foray into the real estate market.
â€œThe Two Rivers property measures 100 acres and is located in the Blue Diplomatic Zone in the Gigiri/ Limuru Road area of Nairobi which provides a key target market close to the subject property,â€ says the information memorandum on Centumâ€™s just concluded private bond placement that raised Sh3.2 billion.
Property developers have pointed out there is high demand in the high-end market, which is expected to grow even more as interest rates come down.
The Hass Consult Composite Sales Index for the second quarter showed town houses had a 6.8 per cent annual growth rate, apartments had a three per cent rate while stand-alone houses recorded a 1.9 per cent growth rate.