Upsurge in demand in serviced apartments in Nairobi

Nairobi City, is amidst of a recent boom in serviced apartments in Africa and globally.  According to the Global Serviced Apartments Industry (GSAIR) in 18 months upto July 2016, serviced apartments in Africa increased 8802 to 9477. According to the GSAIR, between 2014 and 2015 the number of serviced apartments (S.A)increased by 18.2 percent globally.

Locations with serviced apartments in Africa also increased from 102 to 166 in the 18 months period up to July 2016, according to GSAIR.  Still Africa accounts for only 1.15 percent of the global serviced apartments. Also places in Africa with serviced apartments account for 1.54 percent of the world’s serviced apartment locations the GSAIR report added.  Consequently, compared to the other parts of the world S.A in Nairobi and other parts of Africa, cost on average less, with the exception of Central and South America.

Upsurge in demand of S.A in Nairobi has been driven by the city distinguishing itself as a major and vibrant, global business hub, in Africa. According to the 2016 GSAIR report, business travelers to Nairobi, make up 26 percent of all arrivals. A 2016 Global Cities report by Knight Frank the property consultancy firm placed Nairobi on spotlight as one of five cities set to play a bigger role in global business community in the coming years.  Dubai in the United Arab Emirates was also in the list.

Within Africa, the hospitality sector is most advanced in South Africa due to its vibrant economy and globalization.  Since 2009, South Africa’s serviced apartments sector has expanded significantly according to GSAIR, just like other hotel alternatives like hostels, timeshares and guest houses. The net impact of that have been prices for studio apartments being higher in South Africa. A week’s stay at a studio apartment in Nairobi on average can cost 58 Euros, while in Cape Town it can cost 63 Euros according to the GSAIR report.

Demand for S.A in Nairobi or other parts of the world, is also being driven by cost cutting measures multinationals are implementing after 2008/9 financial slump. As a result serviced apartments are cost effective, to house their staff on overseas assignments. According to a 2015 Brookfield Global Relocation Services 63 percent of companies are facing pressure to reduce assignment costs. By staying in serviced apartments unlike hotels extra costs like food and laundry don’t increase rapidly.  They also provide a homely and leisurely feel and companies are discovering young employees prefer serviced apartments when on short term assignments.

Companies opening business in another country are also opting to have their foreign staff temporality housed in serviced apartments than hotels as cost saving measures. Serviced apartments in Nairobi managed by the Warwick Centre are a perfect example of that cost cutting model.

The recent economic boom in Kenya is causing multinationals to open more offices in Nairobi. Between 2011 and 2014, the Kenyan economy expanded by 16 percent according to the National Bureau of Statistics. This growth has resulted in increased middle class in the city. To cater for that demography, investors are developing trendy malls to serve the rising middle class. In 2015, about 1.8 million square foot of modern shopping mall space was opened an increase from 0.98 million square foot according to the Global Cities report. As a result the city is also becoming a shopping trip destination, and fully furnished apartments in Nairobi are accommodating these affluent shoppers on short term visits.


According to a 2016 Global Cities report by Knight Frank, serviced apartments as short term rental accommodation, offer long term rewards to investors and landlords. And cities that embrace the flexibility of models of S.A like Nairobi are bound to reap economic rewards.


Though the trend of serviced apartments is budding in Africa, in North America it began in the 1980s according to the Global Cities report.  North America accounts for 61 percent of the world S.A. But Africa at 34 percent growth in 2015 was the second fastest growing serviced apartments market after Europe at 42 percent,  while North America grew by 6 percent according to the Global Cities report by Knight Frank.

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