According to a report by real estate company HassConsult, the value of land in 14
satellite towns surrounding Nairobi, Kenya has appreciated ten times between 2007 and
2022. This positive trajectory in property investment has made many individuals who
invested in land in these towns, such as Syokimau, millionaires by the end of 2022.
The report also revealed that proceeds from land investments in these satellite towns
surpassed similar investments in premium derivatives like bonds and equities. For
instance, Ksh1 million would have yielded Ksh10 million by the end of 2022 compared
to Ksh6.29 million in suburbs, in a similar period. The other satellite towns that
witnessed such growth include Athi River, Juja, Kiambu, Kiserian, Kitengela, Limuru,
Mlolongo, Ngong, and Ongata Rongai. Ruaka, Ruiru, Syokimau, Thika, and Tigoni are
also part of the satellite station.
According to Sakina Hassanali, Head of Development Consulting and Research at
HassConsult, investment in land in Nairobi satellite towns was even more lucrative
compared to savings in a similar period. “The Hass Land Composite index, Nairobi
satellite index value was 1037.4 outperforming Nairobi suburbs which had an index
value of 628.5,” she stated. Superrich Kenyans also increased their appetite for land in
satellite towns in search of privacy and this also contributed to the sharp price increases
according to Knight Frank’s 2019 report.
Between July and September 2022, land in Syokmau was Ksh22 million per acre
compared to Ksh3 million in 2007. Hassconsult documented that some homeowners
were even willing to negotiate prices of their homes in posh areas at throwaway prices so
as to make investments in the satellite towns.
However, the big question remains to be; how did the 14 satellite towns become
lucrative? Simply put, infrastructure development, affordability and other social
amenities.
Infrastructure development has been credited as one of the key factors that people
consider when purchasing land. Notably, the construction of roads has been credited for
the soaring land prices given that they make remote areas accessible. This also opens up
places for other investments such as schools and malls among others. “On average, land
prices in the satellite towns have risen by more than six-fold and will continue to
increase as infrastructural developments like Standard gauge railway near completion,”
Hassconsult detailed in its 2015 fourth-quarter report. Other infrastructural
developments that have seen the value of land increase include the Standard Guage
Railway (SGR), Eastern bypass, and the Nairobi expressway among others.
Affordability has also played a significant role in the growth of these satellite towns. In
comparison to posh derivatives within the city, land in satellite towns was 10 times
cheaper. For example, as of September 2022, an acre of land in Westlands retailed at
Ksh448,100,000 while Ruaka – which was the most expensive among satellite towns –
retailed at Ksh96,900,000. In 2015, an acre of land in Wetlands went for Ksh388
million while a similar plot in Ruaka was an average of Kh50 million. Fanaka Real
Estate in its 2022 report also pointed out that some towns were selling land at
affordable prices despite mega infrastructural development.
In conclusion, the 14 satellite towns surrounding Nairobi have seen a tenfold increase in
land value between 2007 and 2022 due to infrastructure development, affordability and
other social amenities. This has made land investment in these towns a lucrative
opportunity for individuals.
