Land Price Index

The Hass Property INDEX

Q2.15 LAND INDEX IN ASSOCIATION WITH

Expanded land index shows property in satellite towns has had higher return on investment • Hass and Stanlib today unveil the extended Land Index, covering satellite towns in the Nairobi environs. • The new data shows strong development and investment in these areas with land price growth equaling and bettering those in the inner city suburbs. • Since 2007, land in the inner city suburbs have increased five fold, while land prices in the satellite towns have increased six fold. • Over the past 7 years, Athi River and Juja have posted the best returns, while Kiambu has shown the strongest growth over the 12 months and Kiserian in the quarter ended June 2015. • A high interest rate environment further exacerbated by the recent increase of the central bank rate may drive demand for inner city land as developers move to areas with cash driven purchases.

Land Index Highlights:

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

Nairobi-18 Index Results 1.6% 13.6% 5.59 Fold

Suburb with Highest Quarterly Increase in Land Price Donholm ( +5.1% over last quarter)

Suburb with Highest Annual Increase in Land Price Loresho ( +31.5% over last year)

Suburb with Lowest Quarterly Increase in Land Price Eastleigh ( -5.8% over last quarter)

Suburb with Lowest Annual Increase in Land Price Eastleigh ( -5.0% over last year)

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

Nairobi Satellite-14 Index Results 1.9% 8.3% 6.17 Fold

Suburb with Highest Quarterly Increase in Land Price Kiserian ( +5.4% over last quarter)

Suburb with Highest Annual Increase in Land Price Kiambu ( +21.5% over last year)

Suburb with Lowest Quarterly Increase in Land Price Ongata Rongai ( -1.2% over last quarter)

Suburb with Lowest Quarterly Increase in Land Price Ongata Rongai ( -0.4% over last year)

Q2.15 LAND INDEX IN ASSOCIATION WITH

HassConsult and Stanlib today unveiled the extended Land Index for Quarter 2 of 2015, covering satellite towns in the Nairobi environ. The index, based on advertised land prices in the surveyed areas since 2007, now comprises data from 18 of the city's suburbs as well data from the satellite towns of Athi River, Juja, Kiambu, Kiserian, Kitengela, Limuru, Mlolongo, Ngong, Ongata Rongai, Ruaka, Ruiru, Syokimau Thika and Tigoni. The new data shows strong development and investment in these areas with land price growth equaling and bettering those in the inner city suburbs. Since 2007, land in the inner city suburbs have increased five fold, while land prices in the satellite towns have increased six fold. Effectively what this means, is that investors can receive the same returns on property in satellite areas with a lower cost to market entry. It is clear that as infrastructure has developed in Nairobi, specifically the upgrading of major roads, so have the satellite towns that are connected by them. Over seven years, Athi River posted the highest rises, experiencing an 8.4 fold increase followed by Juja, at 7.83 fold. Kiserian and Kitengela saw the biggest increases in satellite areas over the past quarter, growing by 5.4% and 5.0% respectively. Kiambu however shows the biggest year to date growth at 21.5%. Ruaka, the most expensive acreage of the satellite towns has enjoyed a 9.4% increase in the year to end June 2015 with an average selling price of Ksh 56.6 million per acre. Kiserian has shown significant growth over the year at 14.5%, but still has the lowest price per acre out of the satellite towns at Ksh 5.42 million. The recent increases in the CBR may once again see investors opting for inner city investments, as we saw them do in 2012, that are less volatile and returns that are more predictable. The biggest inner city gain in the second quarter of 2015 was Donholm, which has gained 5.1% and has had an overall increase in value of 10.7% in the past year. Eastleigh has seen the biggest decline in land price falling 5.8% in the quarter and 5% over the last year. “Land continues to be a solid investment, with returns consistently beating other investment avenues such as the stock markets and bond markets,” said Kenneth Kaniu, Chief Investment Officer at Stanlib, commenting on the index. In June 2015, Upper Hill held onto the top position of having the most expensive land acreage in Nairobi, selling at an average price of Ksh. 493 million per acre, 1.7% up in the quarter and 15.3% up for the year. While Donholm has experienced a 5.1% growth over the quarter, it still lays claim to the lowest cost per acre in the inner city at Ksh43.5 million. “Current data highlights real value areas with upcoming development potential and affirm that strong returns continue in selected mature suburbs. Research and data are critical to successful property investment.” said Mr Muratha. For more information, please contact: Kenneth Kaniu - Chief Investment Officer, Stanlib Sakina Hassanali - Head of Research, HassConsult

Q2.15 LAND INDEX IN ASSOCIATION WITH

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

Donholm 5.1 % 10.7 % 4.68 FOLD 43,500,000 28,000,000 50,000,000 Eastleigh -5.8 % -5.0 % 5.73 FOLD 276,000,000 228,000,000 320,000,000 Gigiri 0.8 % 17.8 % 5.53 FOLD 194,000,000 161,250,000 245,000,000 Karen 1.8 % 11.3 % 6.18 FOLD 48,300,000 40,000,000 55,000,000 Kileleshwa 0.7 % 14.1 % 6.37 FOLD 262,000,000 240,000,000 296,700,000 Kilimani 5.0 % 22.1 % 6.14 FOLD 410,000,000 360,000,000 450,550,000 Kitisuru 3.5 % 15.6 % 4.69 FOLD 65,300,000 52,000,000 77,700,000 Langata 2.3 % 11.4 % 4.51 FOLD 48,500,000 40,000,000 55,000,000 Lavington -0.6 % 11.3 % 5.15 FOLD 214,000,000 152,400,000 253,000,000 Loresho 1.9 % 31.5 % 4.53 FOLD 72,000,000 60,000,000 79,800,000 Muthaiga 0.5 % 18.0 % 4.08 FOLD 108,000,000 74,250,000 140,000,000 Nyari -0.9 % 18.0 % 6.37 FOLD 106,000,000 90,000,000 120,000,000 Parklands 0.5 % 8.5 % 4.96 FOLD 386,000,000 325,000,000 472,000,000 Ridgeways -1.0 % 29.8 % 5.54 FOLD 64,200,000 53,300,000 70,000,000 Runda 4.4 % 9.6 % 5.06 FOLD 69,900,000 56,000,000 80,000,000 Spring Valley -1.2 % -0.3 % 3.79 FOLD 142,000,000 120,000,000 167,500,000 Upperhill 1.7 % 15.3 % 8.22 FOLD 493,000,000 426,000,000 580,800,000 Westlands 0.2 % 9.0 % 5.19 FOLD 380,000,000 273,750,000 480,000,000

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

Athi River 0.8 % 11.6 % 8.64 FOLD 11,100,000 3,800,000 16,000,000 Juja 4.3 % 7.3 % 7.83 FOLD 6,790,000 2,800,000 9,200,000 Kiambu 2.4 % 21.5 % 5.87 FOLD 33,700,000 13,575,000 44,750,000 Kiserian 5.4 % 14.5 % 5.47 FOLD 5,420,000 1,500,000 7,800,000 Kitengela 5.0 % 9.0 % 5.05 FOLD 7,720,000 2,800,000 10,700,000 Limuru 3.0 % 16.1 % 7.55 FOLD 14,300,000 7,980,000 16,400,000 Mlolongo 1.3 % 5.0 % 5.85 FOLD 28,200,000 14,360,000 41,250,000 Ngong 3.6 % 12.4 % 5.60 FOLD 17,200,000 10,000,000 20,000,000 Ongata Rongai -1.2 % -0.4 % 6.58 FOLD 15,500,000 7,200,000 20,000,000 Ruaka 4.7 % 9.4 % 5.09 FOLD 56,600,000 44,000,000 79,000,000 Ruiru 0.7 % 3.3 % 6.25 FOLD 14,700,000 5,200,000 20,000,000 Syokimau -0.5 % 5.5 % 5.54 FOLD 16,900,000 10,700,000 23,500,000 Thika 0.4 % 5.4 % 7.00 FOLD 14,300,000 5,000,000 20,000,000 Tigoni 3.6 % 6.5 % 7.08 FOLD 17,600,000 15,900,000 20,000,000

Q2.15 LAND INDEX IN ASSOCIATION WITH

Satellite Towns Land Index Heat Maps

Change in Prices Since 2007

Current Price Versus Market Activity

Q2.15 LAND INDEX IN ASSOCIATION WITH

Hass Land Composite Index SNAP SHOTS: Nairobi Suburbs -18 • The Nairobi Suburbs-18 Land Index is representative 600.0 of Land for Sale in Nairobi covering 18 highest activity 500.0 suburbs

400.0 • Land values have increased by 5.59 fold since December 2007 300.0

200.0 x December 2007 = 100 100.0 Inde

- 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2

Average Land Price SNAP SHOTS: Nairobi Suburbs -18 • The annual average is representative of the average 180,000,000 price of land for sale in Nairobi covering 18 highest 160,000,000 activity suburbs Sh.s 140,000,000 120,000,000 • The average value for land has gone from 32.5 million 100,000,000 in December 2007 to 169.0 million in June 2015 80,000,000 60,000,000 e Asking Price in K

ag 40,000,000 er v

A 20,000,000 0 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2

Supply of Advertised Land Donholm SNAP SHOTS: Nairobi Suburbs -18 Eastleigh Gigiri • The Mix is a measure of the percentage that each 2.7% 3.1% 2.8% 3.2% Karen suburb represents in the market for 18 Nairobi 3.5% Kileleshwa suburbs 5.3% Kilimani Kitisuru • Between 2013 and 2014, Land in Donholm took up 8.9% Langata 18.1% Lavington 3.2% of the market, Eastleigh took up 3.1%, Gigiri 3.6% Loresho 3.5%, Karen 18.1%, Kileleshwa 5.1% Kilimani 11.2%, 4.1% Muthaiga Kitisuru 6.4%, Langata 6.3%, Lavington 4.7%, Loresho 3.8% Nyari 5.1% Parklands 3.0%, Muthaiga 3.9%, Nyari 3.8%, Parklands 4.1%, 3.9% Ridgeways 11.2% Runda Ridgeways 3.6%, Runda 8.8%, Spring Valley 5.3%, 3.0% Spring Valley Upperhill 2.8% and Westlands 2.7% respectively 4.7% Upperhill 6.3% 6.4% Westlands

Q2.15 LAND INDEX IN ASSOCIATION WITH

Hass Land Composite Index SNAP SHOTS: Nairobi Satellite -14 • The Nairobi Satellite-14 Land Index is representative 700.0 of Land for Sale in 14 Satellite towns outside Nairobi 600.0 • Land values have increased by 6.17 fold since 500.0 December 2007 400.0

300.0

x June 2014 = 100 200.0 Inde 100.0

- 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2

Average Land Price SNAP SHOTS: Nairobi Satellite -14 • The annual average is representative of the average 16,000,000 price of land for sale outside Nairobi covering 14 14,000,000 highest activity Satellite towns Sh.s 12,000,000 • The average value for land has gone from 2.4 million in 10,000,000 December 2007 to 15.1 million in June 2015 8,000,000 6,000,000 e Asking Price in K

ag 4,000,000 er v

A 2,000,000 0 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2

Supply of Advertised Land SNAP SHOTS: Nairobi Satellite -14 • The Mix is a measure of the percentage that each Athi River 3.4% Juja town represents in the market for the Nairobi 14 9.3% Kiambu Satellite towns 11.0% Kiserian 8.8% Kitengela • Between 2013 and 2014, Land in Athi River took up 4.7% Limuru 9.3% of the market, Juja took up 8.8%, Kiambu 5.0%, 5.0% Mlolongo Kiserian 5.3%, Kitengela 11.7% Limuru 3.9%, 5.3% Ngong 18.0% Ongata Rongai Mlolongo 2.3%, Ngong 6.7%, Ongata Rongai 7.4%, Ruaka 11.7% Ruaka 2.6%, Ruiru 18.0%, Syokimau 4.7%, Thika Ruiru 11.0% and Tigoni 3.4% respectively Syokimau 2.6% Thika 3.9% 7.4% Tigoni 6.7% 2.3%

Q2.15 LAND INDEX IN ASSOCIATION WITH

Land as an Investment

SNAP SHOTS:

Land Performance vs Commodities The Nairobi Satellite-14 Land Index value was 700.0 617.3 outperforming Nairobi Suburbs-18 Land 600.0 Index which had a value of 558.7, compared to 500.0 Cattle which had a value of 155.4, Gold 149.2 400.0 300.0 and Crude Oil worst performing with only 66.0

x Dec 2007 = 100 200.0 index value.

Inde 100.0 0.0 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2

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 7,000,000 have been worth KSh. 6.17m if invested in 6,000,000 5,000,000 Nairobi’s Satellite Towns, KSh. 5.59m if invested 4,000,000 in the Nairobi’s Suburbs, KSh. 2.01m if invested 3,000,000 2,000,000 in property, KSh. 1.86m if invested in bonds and 1,000,000 KSh. 1.13m if invested in savings. 0 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2

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