Land prices within the Nairobi metropolitan area have appreciated by 19.4 per cent over the last one year driven by increased demand for land and improved infrastructure.[Photo/courtesy]According to the Cytonn 2017 land research report, commercial zones such as Kilimani, Upperhill and Westlands recorded the highest capital appreciation of 24.3% with satellite towns such as Ongata Rongai, Ruaka and Athi River recording a rate of 2.0percent.Cytonn Investment Senior Manager, Johnson Denge, says the high growth rates in commercial zones are driven by increased demand for land for commercial real estate, given its high returns with rental yields on average of more than 9% as compared to an average rental yield of 5% for residential developments.Key drivers for the increments in land prices have mainly been population growth, rapid urbanization, improved infrastructure opening up areas for development, legal reforms easing land transactions and disposable income.The report also noted that the land sector is facing challenges such as inadequate infrastructure in specific areas, multiple land tenure systems, high land costs and a difficult legal environment which need to be addressed. The 2017 land research report was conducted in 18 suburbs and 11 satellite towns in the Nairobi Metropolitan Area.

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