The past week recorded several notable developments across Kenya’s real estate landscape, ranging from regulatory reforms and infrastructure investments to capital market activity in property-backed instruments. These developments collectively highlight the continued evolution of the sector and its growing linkages with national infrastructure, housing policy, and institutional investment.
Proposed Reform in the Architectural Profession
One of the key legislative developments during the week was the review of the Architects Bill, 2026, which proposes a revised legal framework for regulating the architectural profession in Kenya.
Currently, architects operate under the Architects and Quantity Surveyors Act, which established the Board of Registration of Architects and Quantity Surveyors (BORAQS) to regulate both architects and quantity surveyors. The proposed legislation introduces a new institutional framework dedicated exclusively to architects, potentially redefining professional regulation and oversight within the built environment.
If enacted, the Bill could have implications for governance standards, professional accreditation, and industry compliance across Kenya’s construction and development sectors.
Infrastructure Expansion Supporting Real Estate Growth
Infrastructure development continued to play a central role in shaping real estate prospects across the country.
The National Treasury allocated an additional Kshs 14.0 billion to accelerate the extension of the Standard Gauge Railway (SGR) from Naivasha to Malaba via Kisumu. The project’s Phase 2B corridor will cover approximately 263.7 kilometers, and its implementation will require the acquisition of over 5,000 acres of land.
The National Land Commission (NLC) is expected to deploy digital data collection systems during the acquisition process to enhance transparency and efficiency in compensation.
In Nairobi, the Kenya Urban Roads Authority (KURA) also commenced implementation of the Outer Ring Road Bus Rapid Transit (BRT) Line 5 project. The Kshs 7.6 billion project will cover a 10.5-kilometer corridor from Allsops to Taj Mall, following the signing of the construction contract on March 4.
These infrastructure projects are expected to improve urban mobility, stimulate property development along transport corridors, and support long-term economic activity.
Affordable Housing Levy Collections Revised Upwards
Housing policy remained another key theme during the week.
The government revised upwards its projections for Affordable Housing Levy collections for the current financial year to Kshs 97.0 billion, up from the earlier estimate of Kshs 95.0 billion. The revision reflects stronger compliance with statutory payroll deductions and indicates the growing financial capacity of the government’s affordable housing programme.
Increased collections are expected to further support housing delivery initiatives across the country.
Institutional Real Estate Development by KRA
The Kenya Revenue Authority (KRA) also announced plans to undertake a significant real estate expansion under a public-private partnership (PPP) framework.
The proposed development will include a diverse mix of facilities such as data centres, warehouses, office space, housing units, laboratories, and training facilities. The project will be implemented using a Build-Operate-Transfer (BOT) structure, allowing private sector participation in financing and development.
Such institutional developments are increasingly becoming an important component of Kenya’s real estate market.
Investor Activity in the REIT Market
The week also saw notable developments in the real estate investment trust (REIT) segment.
The ALP Industrial REIT (ALP I-REIT) announced the results of its restricted offer on 5 March 2026, achieving a 98.5% subscription rate. The offer raised USD 29.6 million against a USD 30.0 million target, exceeding the minimum success threshold of USD 11.0 million.
Investor confidence was further reinforced by InfraCo Africa’s commitment to invest an additional USD 5.0 million in a pipeline asset, effectively bringing the overall subscription level to 115.2%.
On the Unquoted Securities Platform, Acorn’s Development REIT and Income REIT traded at Kshs 27.4 and Kshs 23.2 per unit, respectively, representing gains of 33.4% and 14.5% from their inception price of Kshs 20.0.
However, ILAM Fahari I-REIT continued to trade below its initial listing price, closing at Kshs 11.0 per unit, reflecting a 45.0% decline from its Kshs 20.0 inception price.
Focus of the Week: Nairobi’s Commercial Office Market
Our focus this week revisits the Nairobi Metropolitan Area (NMA) commercial office sector.
In our previous Nairobi Metropolitan Area Commercial Office Report 2024, themed “Supply-Heavy Market,” we observed gradual improvements in the sector’s performance despite persistent oversupply.
During 2024:
Average rental yields improved slightly to 7.8%, up from 7.7% in 2023
Average asking rents increased to Kshs 105 per square foot, up from Kshs 103
Overall occupancy rates rose to 80.7%, from 79.5%
The improvements were largely attributed to a gradual economic recovery that boosted business activity and demand for physical office space.
Among Nairobi’s office nodes, Gigiri emerged as the top-performing location, posting an average rental yield of 8.8%, outperforming the market average by 1.0 percentage point.
Despite these gains, the sector continued to experience a significant oversupply of office space estimated at approximately 5.7 million square feet, though this was slightly lower than the 5.8 million square feet recorded in 2023.
Looking ahead, our upcoming Commercial Office Report 2025, themed “From Oversupply to Selective Demand,” will examine how evolving business needs, flexible workspace trends, and changing occupier preferences are reshaping demand patterns across Nairobi’s office market.
