Real estate developers in Kenya are increasingly focusing their portfolios on high-end residential projects, capitalizing on the strong demand from affluent buyers and expatriates.
Industry experts highlight that this shift stems from evolving market demands and urban dynamics, notably the expansion of residential development beyond Nairobi into neighboring counties.
According to data from Knight Frank, a significant trend has emerged in the residential sector, where investors are becoming more discerning, prioritizing quality developments aimed at high-net-worth individuals (HNWIs) and diaspora buyers.
David Karimi, head of sales at Tatu City, reports that returns in satellite towns are outpacing those in traditional urban markets, driven by infrastructure development and demographic shifts. He notes, “Historically, land in this area has appreciated by nearly 16 percent annually, while completed homes are seeing around 18 percent capital appreciation. Rental yields for unfurnished units reach up to nine percent, with furnished homes achieving between 12 and 16 percent.”
Data from the firm’s 2025-2026 reports reveal that although overall project launches have slowed due to economic uncertainty and election-related concerns, the demand for premium homes remains robust.
Samuel Kariuki, CEO of Mi Vida Homes, emphasizes that the company’s foray into the premium segment aligns with shifting buyer preferences rather than a deviation from its core strategy. “We began in the mid-market, transitioned to affordable housing, and now we are witnessing strong demand from owner-occupiers for townhouses in master-planned developments,” he explains.
The firm is currently developing 156 units in Tatu City, featuring a blend of three- and four-bedroom townhouses and duplexes, with a project valued at approximately Sh5.6 billion. Kariuki adds, “The development in the Nairobi Metropolitan area is increasingly moving into counties like Kiambu and Kajiado, making it natural for developers to pursue this growth.”
The shift towards high-end housing benefits from a relatively stable base of affluent buyers. Knight Frank’s Wealth Report reveals that 66 percent of high-net-worth individuals view Kenya as a preferred destination for home ownership, which sustains demand even in times of economic uncertainty.
This trend is further bolstered by significant capital inflows into integrated developments, which attracted around Sh65 billion in 2025, despite a decline in approvals for traditional residential projects.
However, the market remains structurally constrained, with only about 3.53 percent of Nairobi households classified as upper-income, limiting market depth.
Additionally, escalating construction costs and stringent financing conditions have hindered the pipeline for new projects, with residential approvals in Nairobi dropping by 27 percent in 2025.
Stephen Jennings, founder and CEO of Rendeavour, notes that Tatu City currently hosts over 7,000 residents, a figure expected to triple in the next five years as more families and businesses seek improved living and working environments.
