Global Commercial Property Portfolio
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Frequently Asked Questions
What is the average return on investment for commercial properties in Kenya?
Prime commercial properties in Kenya typically offer ROI between 8-15% annually depending on location and property type. Office spaces in Nairobi CBD average 8-10%, retail shops in busy areas can yield 10-15%, while well-located warehouses often provide returns of 9-14%. These figures account for both rental income and capital appreciation.
What should I consider when buying a commercial property in Kenya?
Key considerations include: location accessibility and visibility, zoning regulations for your intended use, title deed status (prefer freehold), existing tenancy agreements if applicable, parking availability, power capacity (especially for industrial properties), proximity to transport links, and future development plans in the area that might affect property value.
Are there financing options available for commercial property purchases?
Yes, several Kenyan banks offer commercial mortgages typically covering up to 60-70% of property value with repayment periods of 7-15 years. Development finance is also available for construction projects. Interest rates vary between 12-18% depending on risk assessment. Some Saccos also provide property loans to members at competitive rates.
How does the due diligence process work for commercial properties?
The due diligence process should include: verification of title documents at Ardhi House, searches for any encumbrances or charges, physical inspection of the property by qualified surveyors, review of existing leases (if tenanted), confirmation of all utility connections and outstanding bills, assessment of structural integrity by engineers, and verification of compliance with county government regulations.
What are the ongoing costs of owning commercial property in Kenya?
Beyond purchase price, owners should budget for: annual land rates (0.1-0.2% of value), rental income tax (10% withholding tax), property management fees (5-10% of rent if using an agent), maintenance costs (1-3% of property value annually), insurance premiums (0.2-0.5% of value), and occasional renovations to maintain competitiveness.