The value of apartment rent in Ruaka, Kitengela, Upper Hill and Lang’ata fell in the past year as a supply glut, weaker corporate demand and pressure on household incomes eroded landlords’ pricing power.
According to the latest HassConsult Property Price Index, Ruaka posted the steepest annual apartment rental fall at 2.7 per cent, followed by Kitengela (2.1 per cent), while Upper Hill and Lang’ata registered declines of 0.9 per cent.
The drop stood out in a market most apartment locations continued to record rental growth, signalling an increasingly fragmented residential sector where local factors outweigh broader property trends.
Athi River posted the strongest annual apartment rental growth at 13.4 per cent, followed by Muthangari at 10.3 per cent, while Mlolongo and Syokimau returned 9.5 per cent as Riverside rose by 7.7 per cent.
“Heavy apartment development in Ruaka has expanded supply faster than tenant demand has grown, reducing landlords’ pricing power as a growing number of similar units compete for the same tenant pool,” said HassConsult Co-CEO & Creative Director Sakina Hassanali.
Aerial view of Kitengela town.
Photo credit: Stanley Ngotho | Nation Media Group
Developers who flocked to fast-growing satellite towns over the past decade are increasingly confronting a market in which tenants enjoy wider choice, and landlords have less room to increase rents.
Kitengela is settling after a run that saw apartment rents surge by as much as 20 per cent last year.
“The rental market appears to be normalising after exceptionally strong growth in 2024, bringing rental growth back towards more sustainable levels,” she said.
She also attributed the dips in Upper Hill to adjustments to structural changes in Nairobi’s office market, while in Lang’ata, the co-chief executive said, the area’s predominantly middle-income tenants have become increasingly sensitive to rising household costs, leaving landlords with little room to sustain past rental increases.
“Rental prices continue to adjust as older apartment stock loses pricing power within a relatively narrow corporate and medical tenant market,” she said of Upper Hill.
“Hybrid working, lower corporate accommodation demand and stronger competition from more lifestyle-oriented neighbourhoods have further softened demand.”
The assessment mirrors Knight Frank’s observation that hybrid working continues to reshape office occupation patterns, with occupiers prioritising flexibility and cost efficiency while demand increasingly shifts towards newer mixed-use developments and higher-quality space.
That shift has reduced the captive tenant market that previously supported apartments around Nairobi’s traditional office districts.
Recent Kenya National Bureau of Statistics (KNBS) consumer inflation data has consistently shown that food and transport remain the biggest contributors to household expenditure, squeezing disposable incomes and limiting tenants’ ability to absorb higher rents even as overall inflation eases.
The pressure has become more pronounced among middle-income households that dominate apartment markets outside prime suburbs.
The differing performance comes as developers become more selective about where to build, with investors paying closer attention to neighbourhood-specific demand, instead of relying on the broader Nairobi market.
Knight Frank says occupiers are increasingly gravitating towards developments offering better amenities, convenience and lifestyle features, a shift that has strengthened demand in some residential nodes while exposing weaknesses in others.
Knight Frank also notes that occupiers continue prioritising value and quality as economic conditions remain challenging.
“It is now common to find multiple upcoming high-density residential towers offering premium finishes to attract residents seeking access to previously exclusive areas, or investors hoping to rent out the units, “ Knight Frank noted in its Kenya market update report for the period ended last December.
