Nairobi Rental Yields Hit 20-Year High as Hass Property Index Signals Market Shift
Rental yields in Nairobi have climbed to their highest level in two decades, driven by steady rent increases and subdued property price growth, according to the Hass Property Index Q4 2025 report.
Hass Property said Nairobi’s suburban rental yields rose to 7.4 per cent, the highest since the index began in 2007, as property prices increased by 0.8 per cent in the fourth quarter while rents climbed by 1.5 per cent. Nationally, property prices rose by 0.3 per cent in Q4 and 7.7 per cent over the year, while rents declined by 0.9 per cent in Q4 and 2.5 per cent in 2025, reflecting softer conditions at the Coast and other major towns.
“The city’s rental yields have been on a clear upward path for the last two years, climbing steadily above 7 per cent after many years of running between 5 and 6 per cent,” said Sakina Hassanali, Co-CEO of Hass Property. “It’s a shift happening across the board, despite mixed performance across locations.”
Suburbs and Satellites Drive Growth
Across Nairobi’s 18 monitored suburbs, sales prices rose modestly in Q4, while rents recorded consistent gains, supporting higher yields. House rent growth was strongest in high-end suburbs, led by Ridgeways (up 9.6 per cent) and Lavington (up 9 per cent) over the year. Quarter-on-quarter, Runda posted the strongest rent growth at 3.1 per cent.
Sales prices for houses also performed strongly in select areas. Runda emerged as the top performer with annual house price growth of 12.8 per cent, while Lavington, Muthaiga and Ridgeways each recorded gains of over 10 per cent in 2025. Lavington led Q4 growth, with prices rising 2.8 per cent in the quarter.
In contrast, apartment prices showed mixed performance. Westlands apartments recorded the steepest annual decline, down 11.5 per cent in 2025, though the fall eased to 0.5 per cent in Q4 as rents stabilised and occupancy improved.
Tge Hass Property noted that successive waves of new apartment supply have periodically softened rents, particularly in Westlands, Kileleshwa and Upper Hill, before demand catches up.
Satellite Towns Outperform
Nairobi’s satellite towns delivered a stronger overall performance, with property prices rising 4.5 per cent in Q4 and rents jumping 8.7 per cent, pushing yields to 5.2 per cent, the highest since 2019.
House rental growth in the satellites was led by Ruiru (up 15.6 per cent) and Kiambu (up 14.4 per cent) over the year, while Juja recorded the strongest annual house price growth at 12.2 per cent. However, prices softened in Q4 in Kiambu, Ngong and Kiserian.
Apartment performance in satellite towns remained uneven. Syokimau stood out, with apartment prices rising 10.1 per cent in 2025, while Kiambu recorded the sharpest annual decline at 4.4 per cent, even as apartment rents increased across all satellite markets.
Market Outlook
Hass Property said the data points to a market increasingly driven by rental demand, with yields improving as price growth moderates. “In the apartments market, demand has never stopped expanding, but each area is now finely tuned to how much new development it can absorb at a time,” statemwnt read.
The Q4 2025 Hass Property Index suggests Nairobi’s residential market is entering a phase where income returns, rather than capital appreciation alone, are becoming the primary attraction for investors, particularly in well-located suburbs and fast-growing satellite towns.
