The high rents are an incentive for creation of more office space. If the rents were reducing, the rate of expansion would reduce, as other investment avenues would be more lucrative. As long as the economy keeps expanding, demand for office space inside the city will increase.
With regard to high-end residential real estate, I am told that there's a distortion wrought of "foreign" money flowing into the country. This is quite hard to measure. But because of its relative "abundance", the owners tend to spend it more freely (which leads to inflated prices for lower quality products).
I wish I had more time to analyze this...
From: Evans Ikua <ikua.evans@gmail.com>
To: Skunkworks Mailing List <skunkworks@lists.my.co.ke>
Sent: Mon, November 29, 2010 4:27:54 AM
Subject: Re: [Skunkworks] OT : Kenya's real estate boom fake or real?
I think its a matter of demand and supply. Consider this, our population is increasing almost at the rate of 10 Million people every 10 years. All those people need to be housed. I also cant see why office rent in town is being increased at a time when we have so many new office blocks coming up all over.
Evans
On Mon, Nov 29, 2010 at 1:01 PM, aki
<aki275@gmail.com> wrote:
Ok, to give you an idea on the situation. I recently went over to some place in Kitusuru that some person wanted consultancy on IT integration. The developments are not very old etc. Anyway, I got curious and asked the person what price did the units sell for? When I got the answer, I was completely taken back! Yes, A Million Dollars! WTF, I thought to myself.....who would pay such a price for a place that is more secured than a fort ( meaning people here are always worried about their security ), the roads leading to it are so dingy and pot-holed that you really would want a security escort late at night, there are no street lights for many miles, they have their own borehole ( because we have major water shortages since the 80s- I remember the chania project was supposed to alleviate the situation ) , there is no internet because the nearest fiber tap is about 10 kms away, the list is endless on what does not exist. I could not
add the two together. Then on my recent trip to Cape Town, I went on some tour of some very best scenic bays in the world and where some hollywood stars own property. And property here was relatively as expensive as KE but you get some real good stuff worth of what you would invest. So if I had a Million USD to spend on a property, would it be Kitusuru or Cape town? I already have the answer.
Going back to the thread, I've been following the various articles on KE scene, still makes no sense of what is going on.
Me thots.
Rgds
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