The Hass Land Index Q1.2016

7
Land in satellite towns new investment frontier as developers monopolise city suburbs Land value in Nairobi's 18-suburbs dropped marginally at 0.2 per cent between January and March 2016 attributed to a shift into satellite towns by land investors • The highest fall in land value was experienced in Eastleigh at 7.5 per cent followed by Ridgeways, Kileleshwa and Nyari at 2.4 per cent, 2.2 per cent and 2.0 per cent respectively in the three months to March 2016 while Donholm recorded the highest increase in land price at 9.3 per cent • In contrast land prices in Nairobi's 14 satellite suburbs rose by 1.1 per cent in the first quarter of 2016 Land in Kitengela rose by the 4.4 per cent in the first quarter of 2016, making it the best performing satellite suburb Land continues to outperform other commodities returning nine times that of Gold and thirteen times that of cattle over the past 7 years Investment in land also runs ahead of annualized stocks and bond returns, rendering it the most stable investment option with the highest yields over 7 years HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya T: +254 20 4446914 | F: +254 20 4447200 | M: 0722 204 764/5; 0733 629 786 | E: [email protected] Land Index Highlights: www.hassconsult.co.ke Quarter % Change Annual % Change Change From 2007 Nairobi-18 Index Results The Hass Land Index, Nairobi Suburbs Composite 5.72 Fold 4.1% Quarter % Change Annual % Change Change From 2007 Nairobi Satellite-14 Index Results The Hass Composite Land Index, Nairobi Satellite Towns 6.47 Fold 1.1% 6.8% Suburb with Quarterly Increase in Land Price Highest Suburb with Lowest Quarterly Increase in Land Price Suburb with Lowest Annual Increase in Land Price Suburb with Annual Increase in Land Price Highest Suburb with Lowest Quarterly Increase in Land Price Suburb with Annual Increase in Land Price Lowest Suburb with Highest Quarterly Increase in Land Price Suburb with Highest Annual Increase in Land Price Donholm ( +9.3% over last quarter) Donholm ( +26.1% over last year) Eastleigh( -7.5% over last quarter) Eastleigh ( -12.2% over last year) Kitengela (+4.4% over last quarter) Kiserian (+23% over last year) Mlolongo (-1.6% over last quarter) Mlolongo (-3.8% over last year) LAND PRICE INDEX QUARTER ONE REPORT 2016 -0.2% INDEX The Hass Property

Transcript of The Hass Land Index Q1.2016

Land in satellite towns new investment frontier as developers monopolise city suburbs

• Land value in Nairobi's 18-suburbs dropped marginally at 0.2 per cent between January and March 2016 attributed to a

shift into satellite towns by land investors

• The highest fall in land value was experienced in Eastleigh at 7.5 per cent followed by Ridgeways, Kileleshwa and Nyari

at 2.4 per cent, 2.2 per cent and 2.0 per cent respectively in the three months to March 2016 while Donholm recorded

the highest increase in land price at 9.3 per cent

• In contrast land prices in Nairobi's 14 satellite suburbs rose by 1.1 per cent in the first quarter of 2016

• Land in Kitengela rose by the 4.4 per cent in the first quarter of 2016, making it the best performing satellite suburb

Land continues to outperform other commodities returning nine times that of Gold and thirteen times that of cattle

over the past 7 years

Investment in land also runs ahead of annualized stocks and bond returns, rendering it the most stable investment

option with the highest yields over 7 years

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya

T: +254 20 4446914 | F: +254 20 4447200 | M: 0722 204 764/5; 0733 629 786 | E: [email protected]

Land Index Highlights:

www.hassconsult.co.ke

Quarter % Change Annual % Change Change From 2007

Nairobi-18 Index Results

The Hass Land Index, Nairobi SuburbsComposite

5.72 Fold4.1%

Quarter % Change Annual % Change Change From 2007

Nairobi Satellite-14 Index Results

The Hass Composite Land Index, Nairobi Satellite Towns

6.47 Fold1.1% 6.8%

Suburb with Quarterly Increase in Land PriceHighest

Suburb with Lowest Quarterly Increase in Land Price

Suburb with Lowest Annual Increase in Land Price

Suburb with Annual Increase in Land PriceHighest

Suburb with Lowest Quarterly Increase in Land Price

Suburb with Annual Increase in Land PriceLowest

Suburb with Highest Quarterly Increase in Land Price

Suburb with Highest Annual Increase in Land Price

Donholm ( +9.3% over last quarter)

Donholm ( +26.1% over last year)

Eastleigh( -7.5% over last quarter)

Eastleigh ( -12.2% over last year)

Kitengela (+4.4% over last quarter)

Kiserian (+23% over last year)

Mlolongo (-1.6% over last quarter)

Mlolongo (-3.8% over last year)

LAND PRICE INDEXQUARTER ONE REPORT

2016

-0.2%

INDEXThe Hass Property

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya

T: +254 20 4446914 | F: +254 20 4447200 | M: 0722 204 764/5; 0733 629 786 | E: [email protected] www.hassconsult.co.ke

Nairobi, April 18th, 2016: HassConsult today unveiled land price trends for the first quarter of 2016, showing a marginal

fall in asking prices of land in Nairobi's main suburbs while those its satellite towns continued to accelerate.

The average fall of 0.2 per cent comes as land speculation moves to Nairobi's periphery with Nairobi's main suburbs now

primarily a developer market.

“Land acquisitions in Nairobi now consist primarily of developers keen to build high-density residential, commercial and

retail properties that yield development profits. These profits are secured by the sustained demand for property by both

home owners and investors alike,” said Ms. Sakina Hassanali, Head of Research and Marketing at HassConsult.

Some suburbs in Nairobi however, bucked the trend recording sharp price rises.

“Donholm's land price leap of 9.3 per cent in the quarter highlighted the role of infrastructure upgrades on land prices, as

developers move to take advantage of the areas improved accessibility,” she said.

At the same time, land prices in Nairobi's 14 satellite towns increased by 1.1 per cent over the quarter as investment in

infrastructure by both the national and county governments and the relatively low price of land in satellite towns

presents opportunities for investors looking to benefit from land price appreciation both in the short term and over the

long term.

Land in Kitengela led the pack at an increase of 4.4 per cent over the period, no doubt a response to the suburbs increasing

institutional investments.

“Athi River, Ruaka and Ruiru are some of the satellite cities beginning to attract large scale residential and retail

development. This development shift into Nairobi's periphery is expected to accelerate as infrastructure is rolled out

preparing these towns to be the new frontier for land price gains.” said Ms Sakina Hassanali.

For more information, please contact:

Sakina Hassanali,

Head of Research & Marketing

LAND PRICE INDEXQUARTER ONE REPORT

2016

INDEXThe Hass Property

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya

T: +254 20 4446914 | F: +254 20 4447200 | M: 0722 204 764/5; 0733 629 786 | E: [email protected] www.hassconsult.co.ke

Loresho 77,400,0004.87 FOLD0.5 % 9.5 % 60,000,000 100,000,000

Muthaiga 4.08 FOLD 108,100,000-0.4 % 0.5 % 67,000,000 160,000,000

Nyari 6.28 FOLD-2.0 % -2.4 % 104,600,000 90,000,000 120,000,000

Parklands 4.89 FOLD-1.6 % -1.0 % 380,200,000 320,000,000 480,000,000

Ridgeways 5.34 FOLD-2.4 % -4.6 % 61,900,000 52,000,000 70,000,000

Runda 5.57 FOLD3.7 % 15.0 % 77,100,000 60,000,000 92,000,000

Spring Valley 3.82 FOLD1.3 % -0.5 % 143,300,000 120,000,000 160,000,000

Upperhill 8.52 FOLD0.4 % 5.5 % 511,300,000 450,000,000 600,000,000

Westlands 5.34 FOLD0.6 % 3.1 % 391,100,000 308,000,000 480,000,000

Average Value Per Acre (KShs)

Quarter% Change

Annual% Change 25 Percentile 75 Percentile

Change From 2007

Nairobi SuburbsLand Index

Donholm 52,200,0005.62 FOLD 9.3 % 26.1 % 24,000,000 92,000,000

Eastleigh 5.34 FOLD 256,900,000-7.5 % -12.2 % 200,000,000 340,000,000

Gigiri 5.81 FOLD -1.9 % 5.9 % 204,300,000 143,000,000 266,600,000

Karen 6.48 FOLD0.4 % 6.8 % 50,700,000 44,000,000 60,000,000

Kileleshwa 6.31 FOLD-2.2 % -0.4 % 259,300,000 240,000,000 300,000,000

Kilimani 6.38 FOLD1.2 % 9.0 % 425,700,000 400,000,000 478,800,000

Kitisuru 5.32 FOLD-0.8 % 17.3 % 74,100,000 52,000,000 100,000,000

Langata 4.54 FOLD-0.3 % 2.9 % 48,800,000 23,600,000 60,000,000

Lavington 5.21 FOLD-0.9 % 0.5 % 216,100,000 165,000,000 250,000,000

Average Value Per Acre (KShs)

Quarter% Change

Annual% Change 25 Percentile 75 Percentile

Change From 2007

Nairobi Satellite Town Land Index

Ruaka

Syokimau

Thika

Tigoni

Athi River

Juja

Kiambu

Kiserian

Kitengela

Limuru

Mlolongo

Ngong

Ongata Rongai

Ruiru

14,700,0007.75 FOLD2.5 % 5.7 % 6,800,000 20,800,000

5.56 FOLD 26,800,000-1.6 % -3.8 % 16,000,000 40,000,000

5.68 FOLD-0.8 % 5.1 % 17,500,000 10,000,000 20,000,000

6.76 FOLD0.1 % 1.5 % 15,900,000 6,000,000 21,200,000

5.36 FOLD1.7 % 10.2 % 59,600,000 34,600,000 80,000,000

6.55 FOLD0.7 % 5.5 % 15,400,000 5,600,000 20,800,000

5.63 FOLD-0.1 % 1.1 % 17,200,000 11,200,000 23,000,000

7.13 FOLD1.3 % 2.4 % 14,600,000 5,600,000 20,000,000

7.52 FOLD1.2 % 10.0 % 18,700,000 17,500,000 21,000,000

8.79 FOLD-1.0 % 2.5 % 11,300,000 3,600,000 16,000,000

8.38 FOLD3.4 % 11.8 % 7,300,000 2,800,000 9,000,000

6.41 FOLD2.4 % 11.8 % 36,800,000 14,000,000 50,000,000

6.38 FOLD3.9 % 23.0 % 6,300,000 9,600,000

5.85 FOLD4.4 % 21.7 % 9,000,000 3,800,000 12,400,000

2,500,000

*Price Values rounded to nearest Kshs. 100,000

LAND PRICE INDEXQUARTER ONE REPORT

2016

INDEXThe Hass Property

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya

T: +254 20 4446914 | F: +254 20 4447200 | M: 0722 204 764/5; 0733 629 786 | E: [email protected] www.hassconsult.co.ke

Land Index Heat Maps

Nairobi-18 Suburbs Change in Prices Since 2007

Nairobi-14 Satellite Towns Change in Prices Since 2007

LAND PRICE INDEXQUARTER ONE REPORT

2016

5.62FOLD

5.34FOLD

5.81FOLD

6.48FOLD

6.31FOLD 6.38

FOLD

5.32FOLD

4.54FOLD

5.21FOLD

4.87FOLD

4.08FOLD

5.27FOLD

6.28FOLD

4.89FOLD

5.34FOLD

3.82FOLD

8.52FOLD

5.34FOLD

8.79FOLD

8.38FOLD

6.41FOLD

6.38FOLD

5.85FOLD

7.75FOLD

6.76FOLD

6.55FOLD

7.13FOLD

7.52FOLD

5.56FOLD

5.68FOLD 5.63

FOLD

5.36FOLD

INDEXThe Hass Property

SNAP SHOTS:

of Land for Sale in Nairobi covering 18 highest activity

suburbs

• Land values have increased by 5.72 fold since

December 2007

The Nairobi Suburbs-18 Land Index is representative

SNAP SHOTS:

price of land for sale in Nairobi covering 18 highest

activity suburbs

• The average value for land has gone from 30.3 million

in December 2007 to 173.2 million in March 2016

The annual average is representative of the average

SNAP SHOTS:

suburb represents in the market for 18 Nairobi

suburbs

• Land in Donholm took up 3.2% of the market,

Eastleigh took up 3.1%, Gigiri 3.5%, Karen 18.1%,

Kileleshwa 5.1% Kilimani 11.2%, Kitisuru 6.4%,

Langata 6.3%, Lavington 4.7%, Loresho 3.0%,

Muthaiga 3.9%, Nyari 3.8%, Parklands 4.1%,

Ridgeways 3.6%, Runda 8.9%, Spring Valley 5.3%,

Upperhill 2.8% and Westlands 2.7% respectively

The Mix is a measure of the percentage that each

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya

T: +254 20 4446914 | F: +254 20 4447200 | M: 0722 204 764/5; 0733 629 786 | E: [email protected] www.hassconsult.co.ke

3.2% 3.1%

3.5%

18.1%

5.1%

11.2%

6.4%6.3%

4.7%

3.0%

3.9%

3.8%

4.1%

3.6%

8.9%

5.3%

2.8% 2.7%

Supply of Advertised Land

Nairobi Suburbs -18Donholm

Eastleigh

Gigiri

Karen

Kileleshwa

Kilimani

Kitisuru

Langata

Lavington

Loresho

Muthaiga

Nyari

Parklands

Ridgeways

Runda

Spring Valley

Upperhill

Westlands

LAND PRICE INDEXQUARTER ONE REPORT

2016

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Nairobi Suburbs -18

INDEXThe Hass Property

9.3%

8.8%

5.0%

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3.9%2.3%6.7%7.4%

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18.0%

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Supply of Advertised LandNairobi Satellite -14

Athi River

Juja

Kiambu

Kiserian

Kitengela

Limuru

Mlolongo

Ngong

Ongata Rongai

Ruaka

Ruiru

Syokimau

Thika

Tigoni

SNAP SHOTS:

of Land for Sale in 14 Satellite towns outside Nairobi

• Land values have increased by 6.47 fold since

December 2007

The Nairobi Satellite-14 Land Index is representative

SNAP SHOTS:

price of land for sale outside Nairobi covering 14

highest activity Satellite towns

• The average value for land has gone from 2.4 million in

December 2007 to 15.8 million in March 2016

The annual average is representative of the average

SNAP SHOTS:

town represents in the market for the Nairobi 14

Satellite towns

• Land in Athi River took up 9.3% of the market, Juja

took up 8.8%, Kiambu 5.0%, Kiserian 5.3%, Kitengela

11.7% Limuru 3.9%, Mlolongo 2.3%, Ngong 6.7%,

Ongata Rongai 7.4%, Ruaka 2.6%, Ruiru 18.0%,

Syokimau 4.7%, Thika 11.0% and Tigoni 3.4%

respectively.

The Mix is a measure of the percentage that each

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya

T: +254 20 4446914 | F: +254 20 4447200 | M: 0722 204 764/5; 0733 629 786 | E: [email protected] www.hassconsult.co.ke

LAND PRICE INDEXQUARTER ONE REPORT

2016

-

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Hass Land Composite Index

Nairobi Satellite -14

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Average Land Price

Nairobi Satellite -14

INDEXThe Hass Property

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya

T: +254 20 4446914 | F: +254 20 4447200 | M: 0722 204 764/5; 0733 629 786 | E: [email protected] www.hassconsult.co.ke

Land as an Investment

SNAP SHOTS:

The Hass Land Composite Index, Nairobi

Satellite-14 index value was 647 outperforming

Nairobi Suburbs-18 which had an index value of

572, compared to Cattle which had a value of

139.4, Gold 156.5 and Crude Oil worst

performing with only 41.8 index value.

SNAP SHOTS:

Ksh. 1 million invested at the end of 2007 would

have been worth KSh. 6.47m if invested in land in

Nairobi Satellite-14, KSh. 5.72m if invested in

land in Nairobi Suburb-18, KSh. 2.26m if invested

in property (The Hass Sales Composite Index, All

Properties), Ksh. 2.03m if invested in bonds and

KSh. 1.14m if invested in savings.

LAND PRICE INDEXQUARTER ONE REPORT

2016

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Land Performance vs Other Asset Classes

Nairobi Suburbs-18 Nairobi Satellite-14 Property

Equities Bonds Inflation

Savings

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Land Performance vs Commodities

Nairobi Suburbs-18 Nairobi Satellite-14 Gold

Crude Oil Live Cattle (CME)

INDEXThe Hass Property