A high-rise building under construction in Kilimani, an upmarket suburb in Kenya’s capital Nairobi, towers above the rest.
A signboard at the site shows the building, being put up by a leading Kenyan insurer, will host 163 serviced apartments.
The building is among some 940 others that are being constructed in the capital Nairobi, the coastal city of Mombasa and other parts of the country, some with up to 250 units, amid the boom in Kenya’s tourism sector.
Developers are responding to increased demand for the apartments as they become the preferred choice for both local and foreign tourists thanks to the home-away-from-away experience they offer.
The apartments have consequently taken over Kenya’s tourism accommodation sector as tourists seek to cut costs.
It costs an average of 8,000 shillings (about 80 U.S. dollars) to stay in a serviced apartment in Nairobi for one day, which is lower than 100 dollars three-star hotels charge.
The serviced apartments are usually fully furnished and rented for short or long-term stays.
The model has gained popularity in Kenya outside the business travel space, as more leisure travelers are finding that serviced apartments are easily available and offer a credible and cost-effective alternative, notes Cytonn, a Nairobi-based investment firm.
One of the things that have led to rise in serviced apartments is Kenya’s growing conference and meetings tourism, Antony Kuyo of Avent Properties in Nairobi, said on Monday.
“Kenya has in the last few months hosted several international conferences with thousands of high-profile delegates. These people mainly put up in serviced apartments, what has boosted the sector,” he said.
Kenya early November hosted the international conference on population and development with delegates coming from all over the world.
“Nairobi does not have as many high-end hotels to host such number of delegates as we have witnessed. Serviced apartments have filled the gap,” added Kuyo.
Cytonn, in an analysis, notes that serviced apartments in the capital Nairobi recorded an average rental yield of 7.6 percent in 2019, 0.2 percent points higher than the 7.4 percent recorded in 2018.
“Serviced apartments’ performance slightly improved in 2019 supported by the growing number of tourist arrivals, despite the tough economic environment,” says Cytonn in a report. Enditem
