Last week’s Focus of the Week by Cytonn Research highlighted movement in Nairobi’s serviced apartments market, revealing modest improvements in performance as the city’s residential real estate continues to adjust to post-pandemic demand patterns.
According to the Nairobi Metropolitan Area Serviced Apartments Report 2025, the average rental yield for serviced apartments across the metropolitan region in 2025 edged up slightly to 7.4 percent, from 7.3 percent in 2024. The uptick came on the back of improved occupancy rates and higher monthly charges, signaling slow but measurable progress for investors and operators in a market that has had to recalibrate following demand disruptions in earlier years. Cytonn Report
Occupancy and Pricing: A Gradual Recovery
The serviced apartments segment units, typically leased for shorter stays and targeting both business travelers and extended-stay occupants, recorded an occupancy rate increase to 74.7 percent in 2025. This was paired with a rise in average monthly charges to about KSh 3,366 per square metre, up from KSh 3,155 per square metre the year prior. The combination of occupancy and rate recovery contributed to the slight rental yield improvement. Cytonn Report
While the gains are modest, they reflect a market that is stabilizing after pandemic-related shocks. Earlier reports showed that limited travel, remote work adoption, and steep declines in domestic and international mobility had weighed heavily on serviced apartment demand. The 2025 data suggests that as both business and leisure travel resume more fully, the asset class is beginning to benefit. Cytonn Report
What Investors Are Watching
Investors typically watch rental yields closely as a performance metric, with serviced apartments often positioned between traditional long-stay residential and short-stay hospitality for return potential. A 7.4 percent yield, while not exceptional, indicates that the segment remains competitive relative to other real estate asset classes, especially given the historical disruptions experienced in recent years.
The report fits into a broader suite of research by Cytonn on the Nairobi metropolitan area, including residential and land markets, where long-term demand drivers like urbanization and population growth continue to support real estate investment interest. Cytonn Report
Outlook: Steady, Not Stratospheric
Cytonn’s findings point to a resilient but cautious outlook for serviced apartments in the Nairobi region. Occupancy and average rates are improving, but the pace of growth suggests that supply dynamics, economic conditions, and evolving preferences among domestic and international travelers will continue to shape performance.
For real estate investors, the takeaway is that Nairobi’s serviced apartment market remains viable, with incremental gains rather than sharp rebounds. As Kenya’s capital consolidates its role as a commercial hub, segments like serviced accommodations will be watched for their ability to deliver steady returns over time in an evolving urban landscape.
