Is Nairobi's Upscale Rental Market Still Worth It? What Investors Need to Know in 2025

The high-end real estate market in Nairobi has long been buoyed by demand from expatriates working in diplomatic missions, international NGOs, and multinationals. However, a recent report by Business Daily reveals a growing concern among landlords in areas such as Runda, Karen, and Gigiri: vacant units and reduced rental income.

The primary cause? A notable decline in the number of foreign tenants — a trend attributed to reduced foreign aid, shifting diplomatic strategies, and a preference for leaner operations by international agencies. For investors in Nairobi’s upmarket rentals, this begs the question: Is it still worth investing in these luxury properties?

What’s Happening in the Market?

• Shrinking Expat Demand: Foreign missions and NGOs are downsizing or relocating their staff, leading to fewer long-term expat tenants.
• Higher Vacancy Rates: Prime neighbourhoods are seeing longer listing periods and greater pressure to reduce rental prices.
• Rental Yields Squeezed: Owners are now negotiating lower rates or offering added incentives like furnished units, shorter leases, or shared services to remain competitive.

What Should Investors Consider in 2025?

1. Rethink Your Target Tenant
The local upper-middle-class market is expanding. Professionals, returnee diaspora, and high-net-worth individuals are increasingly seeking modern, secure homes — especially gated communities with flexible payment options.

2. Diversify Property Offerings
If your portfolio is heavily reliant on top-tier standalone villas, consider integrating more flexible units like:

• Apartments or townhouses with smaller footprints.
• Furnished options for corporate leases or short-term stays.
• Properties near growing commercial hubs like Westlands, Kilimani, or Lavington.

3. Focus on Amenities & Maintenance
Properties with features like backup power, water security, internet-ready infrastructure, and well-maintained common spaces are outperforming dated builds. A fresh coat of paint or an upgraded kitchen can go a long way in attracting and retaining tenants.

4. Play the Long Game
Real estate is still a solid long-term asset — but smart investors are shifting strategies. With the right pricing, positioning, and property management, even high-end homes can remain profitable. Consider professional property management to minimize downtime and optimize returns.

In summary, the Nairobi real estate market is evolving — and so should your investment strategy. While the golden era of guaranteed expat tenancy may be slowing, opportunities still exist for agile investors who are ready to adapt.

Whether you're buying, selling, or holding, get in touch with our team for tailored investment advice and listings that match today's market demands.

 Article by,

Sheila Awuor Odhiambo

Marketing Executive