Growing demand for serviced apartments in Kenya

George Sell George Sell Uploaded 25 May 2017

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Kenya: Demand for luxury serviced apartments in Kenya is strong according to Britam chief executive Benson Wairegi.

The insurance group has diversified in to the sector, and Wairegi says the demand is growing fast due to the growth of business tourism in the country. His comments came as the company broke ground on an 11-storey, 163-unit serviced apartment development in the upmarket Kilimani area in Nairobi.

The property will include  a central  laundry,  swimming pool, secure surface parking, private restaurant, private gardens, steam/sauna, housekeeping services as well as Wi-Fi, open-plan lounge and dining room, air conditioning, satellite television, fully equipped kitchens and high quality furnishing. Set to be completed in 2019, the property will be developed by Britam Properties, a fully owned subsidiary of Britam Holdings Limited. 

"The property market in Kenya is growing fast and as apart our business strategy, luxury serviced apartments are now in high demand. The market will need at least 1000 serviced apartments in the next three years and Britam Properties will help in bridging this gap," said Wairegi.

In 2016 Kenya hosted 243 global and continental meetings in 2016 that attracted thousands of participants and many heads of State and government. Business travel spending ison the increase in Kenya. In 2014, it generated 37.5 per cent of direct GDP, up from 34.6 per cent in 2013. In 2015 this segment increased further by 5.4 per cent to reach Sh150.9bn.

"Britam's decision to venture into the property and real estate development is part of the groups' diversification strategy meant to reduce portfolio risk and exposure to the volatile stock exchange market," Wairegi said.

A recent report by Cytonn Investments shows that the serviced apartment sector is performing better than hotels in Nairobi. Apartments, on average, have 90 per cent occupancy rates while revenue per available room stands at $127 (Sh12, 874). This occupancy is 29.6 per cent higher than hotels and is 33.5 per cent cheaper on average than a hotel room.

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