2023 Predictions on Real Estate in Kakamega

Real Estate in Kakamega continues to enjoy an upward trajectory for a decade now. This comes at a time even as more and more investors opt to inject their capital in properties for various reasons, especially those in the diaspora. As we usher in this new year, alot of trends are likely to change that will in turn reflect on their preferences by tenants, property buyers as well as the stakeholders involved.

From our engagements with stakeholders such as real estate agents, surveyors, developers, project financiers and tenants, a few of these are likely to occur this year.

1. Hospitality sector

To kickstart our listing, the hospitality sector has definitely undergone lots of transformations in less than 5 years. Within this period, Kakamega has given rise to over ten quality hotels and joints spread across the town. A few deserving a mention are Pennjoki Resort and Skyz9 Hotel and Grand Turaco Hotel all along at Mumias Road. To put into perspective, In less than a decade ago, Kakamega had the fewest hotels in the region and now is gaining a competitive advantage over the number of available facilities.

Heading into 2023, we anticipate more investments in the hospitality sector in terms of development of resorts that are currently in short supply due to the growing demand by the emerging middle class. That will also create more value across the value chains such as tourism in the region taking advantage of the Nairobi direct flights. Also, there will be an increased competition between the established hotels and the new entrants for customers and this is likely to drive up quality of customer service and a range of related services such as accomodations costs and quality among others.

Something worth mentioning however is the increasing development of hospitality facilities on small pieces of land that leaves little space after development for parking spaces and children play area. This is counterproductive since families require these kinds of spaces for their children and greenery is necessary as well. If not looked into, we may end up with ghost facilities in towns that customers only resort to for business meetings or end up with nowhere to park their vehicles.

2. Commercial Property Sector

Kakamega continues to experience a mismatch between the demand and supply of office spaces even as we enter another. One of the biggest challenge being the commercial property developers rental income expectations vis-a-vis client’s rental budgets. So we’ve ended up with empty halls in various complexes and plazas such as the Patience Plaza along Mumias road that is 80% vacant, the Mega Mall opposite the county headquarters that’s around 60% vacant, Ambwere Towers being over 80% vacant among many others.

This is happening at the same time as we keep getting enquiries for office spaces from interested clients. So what is the challenge? Why are developers contending with empty floors running over 6,000ft across town when they can be making money in rental income by setting reasonable pricing?

And as we anticipate the opening of the first phase of the Kakamega Cathedral Mall this year, alot of concessions need to be made amongst stakeholders so that a win-win situation can be reached. If not, Kakamega will remain a ghost town with huge empty plazas and shopping malls whose life is only dependent on the anchor tenant.

Another key key prediction on the real estate in Kakamega is developing of commercial buildings with access lifts to reach floors above the third floor. This happenstance is occurring even as a middle class is emerging that has experienced different towns before moving to Kakamega hence know what they’re looking for. Both as a rental tenant and as a customer. If you ask me, this is the reason why the Ambwere Towers remains empty from the second floor to the last one even though it’s within the CBD.

3. Residential Property Sector

Generally, If you understand Kakamega well, then you most likely have been awed by the rate at which very quality developments are coming up. Within the last half decade, we have over 20 highrise apartments spread across the larger Municipality. For a town that had little or no options for high value apartments that would rent for Ksh. 20,000, now having rental apartments going for as much as Ksh. 35,000 is worth noting.

Our prediction is that even though a percentage of tenants are worried that the pricing is overrated for some, we believe that the supply and demand dynamics will definitely stabilize the rental prices starting from this year onwards. Such quality developments are a further testament that Real Estate in Kakamega is actually ripe for developers who can setup offplan apartments developments for buyers to acquire.

Besides this, tenants needs will be a top consideration for prospective developers. It is going to be a buyer’s market when it comes to the rental sector. Amenities such as security, children play area, parking spaces, chill zones, fulltime water availability will now be a determining factor for occupancy. You may ask whether this locks out developments that haven’t factored in all this. Well, it doesn’t technically but they need to make steps towards infusing afew of them. Valuable Homes Ltd is here to help.

4. Industrial Real Estate in Kakamega

The industrial property sector has been ignored for a very long time in Kakamega. Though 2023 is the year that all this changes. Already, the town has the first established warehouse at Lurambi. Nevertheless, we need to invest in more warehouse facilities and industrial complexes. Having such in place would make it very easy for an investor just looking infrastructure to setup their machineries and hit the market with their products.

So you don’t have to force yourself into any crowded subsector when this opportunity is available.

5. Land Prices

Basically, the land prices are still expected to go up this year. Luckily though, we are likely to see a sharp decrease in the number of the rogue cahoot of land brokers and agents inflating land prices.

This is likely to be due to the emergence of a more credible group of agents joining the market and the buyers having access to opportunities easily on websites such as this and others of good reputation.

6. Project Financing

Finally, project financing predictions are pointing towards an increase in uptake due to a stabilized economy. The essening of the regulations by the Central Bank of Kenya (CBK) on banks is another indicator of a great year. This would lead to more mortgage financing to those who qualify.

With such financing, a snowball effect will be felt throughout the sector.

In conclusion, Real Estate in Kakamega will experience a very consistent growth in the residential, commercial as well as the hospitality sectors. In terms of economy, these translates to more jobs and more investments to our county. And the raising of our towns profile as a big real estate player only means that the city status will be ours for the taking.