By Bedah Mengo and
Wang Xiaopeng NAIROBI (Xinhua) -- On
one side of the rural town named Majengo in Vihiga, Western
Kenya, stands a two-story building that is nearing completion.
Few metres away from the house is another three-story one, which
is hosting several small businesses, including mobile money
Away from the two commercial buildings, several others,
including residential ones, stand in the small trading center, a
sign of real estate boom that is happening in many rural towns
across the East African nation.
Buildings are sprouting up in the once sleepy towns as demand
for houses and business premises rises, with the centers
seemingly choking with real estate development.
The rural towns have become the new frontier for real estate
developers seeking to invest away from the capital Nairobi,
where many high-rise buildings are under construction and house
prices have risen sharply over the past few years.
In addition to increased demand for houses and business
premises, rising rent due to fast economic growth is luring
investors to the trading centers in towns.
Other factors attracting real estate developers include
improved infrastructure with nearly all trading centers across
the country having their roads upgraded and getting electricity
"I was born in this town and have lived here ever since but I
had never seen so much construction as it is happening now.
"New buildings are coming up nearly every month changing this
small town rapidly," said Benson Chavune, a resident of Majengo.
Chavune, who runs a meat shop at the center noted that the
owner of the building hosting his shop has given them notice to
"He sold the property and the new owner wants to demolish
these shops so that he can build a three storey modern one," he
said, noting the era of cheaper business premises that go for
about 50 dollars a month is slowly fading in the town.
Monthly rent in the town, as many others across the country,
has been on the rise with a single-room shop going for up to 150
U.S. dollars, from nearly half the amount some two years ago.
On the other hand, residential houses are going for between
120 dollars and 150 dollars for a two-bedroom house per month
with a one-bedroom house being rented out for 100 dollars.
Initially, most of the houses being built in rural Kenya for
renting were bungalows but recently apartments and maisonettes
are taking the pride of place.
"Developers want to cash in on the real estate boom amid
declining land sizes whose prices are on the rise, with a
quarter acre going for up to about 29,126 dollars.
"You can not build bungalows and reap quarter and eighth
"One must utilize the space above, which is what the
developers are doing," said Antony Kuyo, a real estate
consultant with Avent Properties in Nairobi.
He noted that just as in Nairobi, apartments are becoming
popular in rural areas because of rising returns, which stood at
12 percent in 2016 comprising rent and capital growth as
compared to other houses.
As those in urban areas, developers in the rural towns are
also paying extra attention to quality and presenting buyers
with trendy houses that are luring more people.
But it is not only small business premises and residential
areas being constructed, property developers have detected the
potential of rural areas, with some going for huge real estate
projects similar to those in Nairobi.
One such a project is in Butere, Kakamega County in western
Kenya, where a developer is putting up a 2 billion dollar city.
The city contains a shopping complex with 1,500 rooms, a
36-hole golf resort and a residential area with 4,800 houses.
"We will also have a mall that will have a supermarket,
several shops and a medical complex that will host dozens of
healthcare experts," said Julius Mwale, the U.S. based investor,
adding that once completed, the development will be a first in
the region and in rural Kenya.
According to Cytonn, a Nairobi-based investment firm, real
estate sector across Kenya continues to grow across the country
supported by high annual returns that stands at above 20
percent, high demographic, rapid urbanization at 4.3 percent
annually, an expanding middle-class and improved infrastructure.