LAND PRICE INDEX QUARTER FOUR REPORT 2018

Development needs driving localised land price surges as market becomes more sophisticated

· Overall, land price growth slowed across 2018, most significantly across 's suburbs, which saw price rises of 1.1 per cent for the full year. •Similarly, prices in satellite areas rose 3.7 per cent in 2018, compared with 5.43 per cent in 2017. •But growth has become more localised, with overall growth driven by strong rises in areas of intensive ongoing development or immediate development potential. •This saw prices in rise 16.5 per cent over the year, and in Gigiri by 10.6 per cent. •The area of sharpest price take off in the fourth quarter of 2018 was Mlolongo, where prices rose by 4.6 per cent in the last 12 weeks of the year. •These development drivers see Nairobi land continuing to outperform global asset classes, in a year when the prices of both gold and oil declined sharply.

Land Index Highlights:

The Hass Composite Land Index, Nairobi Suburbs Quarter % Change Annual % Change Change From 2007

Nairobi-18 Index Results 0.40% 1.12% 6.30 Fold

Suburb with Highest Quarterly Increase in Land Price Land in Gigiri ( +3.43% over last quarter)

Suburb with Highest Annual Increase in Land Price Land in Gigiri ( +10.61% over last year)

Suburb with Lowest Quarterly Increase in Land Price Land in Upperhill ( -1.16% over last quarter)

Suburb with Lowest Annual Increase in Land Price Land in Kilimani ( -3.88% over last year)

The Hass Composite Land Index, Nairobi Satellite Towns Quarter % Change Annual % Change Change From 2007

Nairobi Satellite-14 Index Results 0.21% 3.72% 8.52 Fold

Suburb with Highest Quarterly Increase in Land Price Land in Mlolongo(+4.62% over last quarter)

Suburb with Highest Annual Increase in Land Price Land in Juja (+16.45% over last year)

Suburb with Lowest Quarterly Increase in Land Price Land in (-1.81% over last quarter)

Suburb with Lowest Annual Increase in Land Price Land in Kiambu (-5.18% over last year)

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, www.hassconsult.co.ke T: 0709 479 000 | E: [email protected] LAND PRICE INDEX QUARTER FOUR REPORT 2018

Land price growth slowed in and around Nairobi in 2018, according to the Hass Land Price Index issued today. However, the overall deceleration has come on a shift in land pricing towards localised pricing driven by immediate development needs, rather than general rises driven by speculation and sentiment.

“We are really seeing each area emerge with its own independent market dynamic, driven by its own infrastructure changes, pace of current building and development potential,” said Sakina Hassanali, Head of Development, Consulting and Research at Hass Consult.

“This shift towards pricing driven by practical development needs is creating a far wider spread in price trends, with each area effectively running on its own market dynamics.

“As a result, the spread from the best performing suburbs to the worst performing has become far wider. The top performing areas, such as Juja in 2018, which reported land price growth of 16.5 per cent, continue to report exceptional price growth. But areas where there is now little remaining land for development, or where there has been some over-building and there is clear vacancy, experienced little land price growth momentum in 2018,” she said.

Overall, land prices across Nairobi's suburbs rose by 1.1 per cent in 2018. But in Gigiri, which has moved into a relatively intense period of residential and commercial development, land prices rose by 10.6 per cent across the year, and were still accelerating at year end.

In the 12 weeks from October to December, land prices in Gigiri rose by a further 3.4 per cent.

Land prices also rose sharply in Ridgeways in 2018, up 8.7per cent over the year, but this growth slowed significantly in Q4, to just 0.7 per cent. Growth was also strong across the year in Kileleshwa, Kitisuru and Langata.

Nairobi's satellite areas saw much stronger land price growth than the city suburbs, rising by an overall 3.7 per cent, compared with 5.4 per cent in 2017.

Key drivers were the land price rises in Juja, and rises of 9.3 and 9.2 per cent in and Ngong. Local centres of development such as , Tigoni and also continued to rise at rates of 6 per cent or above.

The sharp climber for the year, however, and the area to watch for further land price growth in 2019, was Mlolongo, where land prices rose by 7.6 per cent in 2018, but almost entirely in the second half of the year. From October to December alone, Mlolongo prices rose by 4.6 per cent.

“As the attention of developers moves from one high potential area to the next, local price hotspots are continuing to underpin overall land price growth, maintaining the relative strength of the region's land as an asset class, as the global slowdown impacted returns in many other areas,” said Sakina.

Gold prices fell by 5.5 per cent in 2018, while oil prices fell by 16.3 per cent, and live cattle prices stagnated.

“Overall, the market for land is becoming more sophisticated. Where change is underway, the returns remain outstanding for any asset class, but in areas that are now more fully developed, often to a high density, prices are now much more static, said Sakina.

For more information, please contact: Sakina Hassanali, Head of Development Consulting & Research

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya www.hassconsult.co.ke T: 0709 479 000 | E: [email protected] LAND PRICE INDEX QUARTER FOUR REPORT 2018

Quarter Annual Change Nairobi Suburbs Average Value 25 Percentile 75 Percentile Land Index % Change % Change From 2007 Per Acre (KShs)

Donholm 0.3 % 1.3 % 7.55 FOLD 70,200,000 55,000,000 80,000,000 Eastleigh 0.8 % 4.9 % 6.16 FOLD 296,300,000 157,000,000 450,000,000 Gigiri 3.4 % 10.6 % 7.10 FOLD 249,600,000 110,000,000 358,300,000 Karen 1.1 % 3.2 % 7.73 FOLD 60,400,000 55,000,000 66,700,000 Kileleshwa 0.1 % 6.2 % 7.45 FOLD 306,500,000 260,000,000 340,000,000 Kilimani -0.1 % -3.9% 6.38 FOLD 425,700,000 392,900,000 490,600,000 Kitisuru 1.5 % 6.8 % 6.13 FOLD 85,400,000 75,000,000 100,000,000 Langata 2.5 % 6.5 % 5.82 FOLD 62,700,000 50,000,000 70,000,000 Lavington 0.6 % 2.1 % 5.77 FOLD 239,200,000 193,000,000 279,600,000 Loresho 1.8 % 5.9 % 5.46 FOLD 86,800,000 76,000,000 100,000,000 Muthaiga 1.6 % 1.1 % 5.60 FOLD 148,500,000 100,000,000 200,000,000 Nyari 0.8 % 0.1 % 6.08 FOLD 101,300,000 90,000,000 110,000,000 Parklands -0.4 % 0.3 % 5.34 FOLD 415,300,000 380,000,000 460,000,000 Ridgeways 0.7 % 8.7 % 6.49 FOLD 75,200,000 64,000,000 80,000,000 Runda 0.0 % 3.0 % 6.27 FOLD 86,700,000 70,000,000 100,000,000 Spring Valley -0.2 % -1.9 % 4.24 FOLD 159,100,000 120,000,000 185,700,000 Upperhill -1.2 % 0.2 % 9.20 FOLD 551,800,000 456,100,000 618,900,000 Westlands 1.5 % 0.6 % 5.70 FOLD 417,500,000 360,000,000 480,000,000

Quarter Annual Change Nairobi Satellite Town Average Value 25 Percentile 75 Percentile Land Index % Change % Change From 2007 Per Acre (KShs)

Athi River 0.6 % 8.7 % 9.92 FOLD 12,700,000 4,000,000 18,000,000 Juja 2.3 % 16.5 % 15.28 FOLD 13,300,000 4,800,000 17,100,000 Kiambu -1.8 % -5.2 % 7.25 FOLD 41,600,000 22,000,000 50,000,000 Kiserian -0.3 % -2.0 % 7.16 FOLD 7,100,000 3,600,000 9,600,000 0.9 % -2.6 % 7.22 FOLD 11,000,000 6,400,000 14,400,000 Limuru -1.5 % 6.6 % 11.52 FOLD 21,900,000 12,000,000 30,000,000 Mlolongo 4.6 % 7.6 % 5.48 FOLD 26,400,000 13,000,000 40,000,000 Ngong 1.2 % 9.2 % 6.73 FOLD 20,700,000 12,000,000 26,300,000 Ongata Rongai 1.0 % 9.3 % 8.79 FOLD 20,600,000 8,700,000 28,000,000 Ruaka -0.5 % 3.9 % 7.76 FOLD 86,400,000 65,000,000 112,000,000 -0.4 % 4.1 % 10.29 FOLD 24,200,000 11,200,000 32,000,000 Syokimau 0.4 % -2.8 % 6.73 FOLD 20,500,000 14,000,000 27,800,000 0.3 % 0.9 % 8.88 FOLD 18,200,000 9,000,000 24,100,000 Tigoni 1.7 % 7.1 % 9.28 FOLD 23,100,000 15,800,000 30,000,000

*Price Values rounded to nearest Kshs. 100,000

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya www.hassconsult.co.ke T: 0709 479 000 | E: [email protected] LAND PRICE INDEX QUARTER FOUR REPORT 2018

Land Index Heat Maps

Nairobi-18 Suburbs Change in Prices Since 2007

6.13 FOLD 6.27 FOLD 6.49 6.08 FOLD 4.24 FOLD 7.10 FOLD FOLD 5.60 FOLD 5.46 FOLD 5.34 FOLD 5.77 FOLD 5.70 FOLD 6.16 7.45 FOLD FOLD 6.38 FOLD 7.55 9.20 FOLD FOLD 7.73 FOLD 5.82 FOLD

Nairobi-14 Satellite Towns Change in Prices Since 2007

8.88 FOLD

15.28 11.52 FOLD FOLD 9.28 10.29 FOLD FOLD 7.25 FOLD 7.76 FOLD

6.73 FOLD 6.73 FOLD 8.79 FOLD 5.48 FOLD 7.16 FOLD 9.92 7.22 FOLD FOLD

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya www.hassconsult.co.ke T: 0709 479 000 | E: [email protected] LAND PRICE INDEX QUARTER FOUR REPORT 2018

Hass Land Composite Index SNAP SHOTS: Nairobi Suburbs -18 700.0 • The Nairobi Suburbs-18 Land Index is representative of Land for Sale in Nairobi covering 18 highest activity 600.0 suburbs 500.0 • Land values have increased by 6.30 fold since 400.0 December 2007 300.0

200.0 x December 2007 = 100

Inde 100.0

- 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4

Average Land Price SNAP SHOTS: Nairobi Suburbs • The annual average is representative of the average 900.0 price of land for sale in Nairobi covering 18 highest 800.0 activity suburbs 700.0 • The average value for land has gone from 30.3 million 600.0 500.0 in December 2007 to 190.7 million in December 2018 400.0 300.0

x December 2009 = 100 200.0

Inde 100.0 - 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4

Supply of Advertised Land SNAP SHOTS: Nairobi Suburbs -18 Donholm • The Mix is a measure of the percentage that each Eastleigh 0.8% suburb represents in the market for 18 Nairobi 0.8% 0.7% 3.2% Gigiri Karen suburbs 1.5% 6.5% Kileleshwa Kilimani • Land in Donholm took up 0.8% of the market, Kitisuru Eastleigh took up 0.8%, Gigiri 0.7%, Karen 31.5%, 12.9% 31.5% Langata Lavington Kileleshwa 3.5% Kilimani 7.0%, Kitisuru 3.9%, Loresho 2.7% Langata 4.3%, Lavington 10.8%, Loresho 1.9%, Muthaiga 2.9% Nyari Muthaiga 2.9%, Nyari 2.1%, Parklands 2.9%, 2.1% Parklands 2.9% Ridgeways Ridgeways 2.7%, Runda 12.9%, Spring Valley 1.5%, 1.9% 10.8% 7.0% 3.5% Runda Upperhill 3.2% and Westlands 6.5% respectively Spring Valley Upperhill 4.3% 3.9% Westlands

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya www.hassconsult.co.ke T: 0709 479 000 | E: [email protected] LAND PRICE INDEX QUARTER FOUR REPORT 2018

Hass Land Composite Index SNAP SHOTS: Nairobi Satellite -14 • The Nairobi Satellite-14 Land Index is representative 900.0 of Land for Sale in 14 Satellite towns outside Nairobi 800.0 700.0 • Land values have increased by 8.52 fold since 600.0 December 2007 500.0 400.0 300.0

x December 2009 = 100 200.0

Inde 100.0 - 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4

SNAP SHOTS: Average Land Price Nairobi Satellite -14 • The annual average is representative of the average 25,000,000 price of land for sale outside Nairobi covering 14 highest activity Satellite towns

Sh.s 20,000,000 • The average value for land has gone from 2.4 million in 15,000,000 December 2007 to 20.8 million in December 2018

10,000,000 e Asking Price in K

ag 5,000,000 er v A 0 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4

Supply of Advertised Land SNAP SHOTS: Nairobi Satellite -14 Athi River • The Mix is a measure of the percentage that each Juja 1.1% Kiambu town represents in the market for the Nairobi 14 9.4% 6.3% Kiserian Satellite towns 8.2% 5.3% Kitengela • Land in Athi River took up 6.3% of the market, Juja Limuru 5.4% took up 8.2%, Kiambu 5.4%, Kiserian 5.3%, Kitengela Mlolongo 5.3% 19.1% Limuru 4.6%, Mlolongo 1.6%, Ngong 7.9%, 15.1% Ngong Ongata Rongai Ongata Rongai 7.9%, Ruaka 2.7%, Ruiru 15.1%, 19.1% Ruaka Syokimau 5.3%, Thika 9.4% and Tigoni 1.1% 2.7% 7.9% Ruiru respectively. Syokimau Thika 7.9% 4.6% 1.6% Tigoni

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya www.hassconsult.co.ke T: 0709 479 000 | E: [email protected] LAND PRICE INDEX QUARTER FOUR REPORT 2018

Land as an Investment

SNAP SHOTS: Land Performance vs Commodities The Hass Land Composite Index, Nairobi Satellite-14 index value was 851.9 outperforming 900.0 800.0 Nairobi Suburbs-18 which had an index value of 700.0 600.0 630.1, Gold 155.3, Live Cattle (CME) 127.8 and 500.0 Crude Oil worst performing with only 56.6 index 400.0 300.0 value. x Dec 2007 = 100 200.0

Inde 100.0 0.0 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4

Nairobi Suburbs-18 Nairobi Satellite-14 Gold Crude Oil Live Cattle (CME)

SNAP SHOTS:

Land Performance vs Other Asset Classes Ksh. 1 million invested at the end of 2007 would (The Growth of Kshs. 1,000,000 invested on 2000 Dec) have been worth KSh. 8.52m if invested in land in Nairobi Satellite-14, KSh. 6.30m if invested in land in Nairobi Suburb-18, KSh. 2.47m if invested 10,000,000 in property (The Hass Sales Composite Index, All 8,000,000 Properties), Ksh. 2.54m if invested in bonds and 6,000,000 4,000,000 KSh. 1.31m if invested in savings and only Ksh. 2,000,000 0.52m if invested in Equities 0 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018 Q4

Nairobi Suburbs-18 Nairobi Satellite-14 Property Equities Bonds Savings Inflation

HassConsult Limited | ABC Place, Waiyaki Way | P.O. Box 14090 - 00800 Nairobi, Kenya www.hassconsult.co.ke T: 0709 479 000 | E: [email protected]