OKOWA: What relocation of UN offices to Nairobi means for real estate

Image of Luxury Living & Design Expo – Panel discussion./HANDOUT

We have a problem. Do we?

Last Saturday’s Ownership 360 panel discussion was the climax of the annual, much-anticipated and bespoke Luxury Living & Design Expo at Village Market.

I have a fetish for this expo for two reasons: it is immensely steeped in the real estate and construction sector relevant content, and most importantly, it is embarrassingly well organised.

I wonder why those organising similar expos don’t take a cue from it. Anyway, I was among the panellists as we delved into inter alia, the future of real estate in Kenya.

One particular question from the audience stood out to me. It is the raison d'être for writing this, since I have profusely pored over it. “With UN relocating three major offices to Nairobi, what ripple effect will this have on real estate?”

Let me admit that up until this question, I hadn’t given much thought to the domino effect relocation of these new UN offices to Nairobi would be.

Yes, I had heard or should I say read about it, in the social media space. That is it! However, upon careful and intentional examination, allow me to say that this is a matter we in the industry, including the government, must give some serious consideration.

There are going to be profound consequences to this relocation, warts and all. Before I delve into the discussion of the implications, let me give some base context.

The UN is planning to relocate the global headquarters of three agencies from New York to Nairobi.

I have read some reporting saying it's two agencies, as the third is not yet fully confirmed. However, I will refrain from focusing on the pedantry. Whether they are two or three agencies, the impact would more or else be the same. 

These agencies are: UNICEF (United Nations Children’s Fund), UNFPA (United Nations Population Fund), and UN Women (United Nations Entity for Gender Equality and the Empowerment of Women).

These, as you know, will join the already existing UN Environment Programme (UNEP) and UN-Habitat, which are headquartered in Nairobi.

So, to go back to the question I was asked last Saturday, what ripple effect will this have on Nairobi real estate?

First, there is the aspect of property price increase. It happened in parts of New York, it will happen in parts of Nairobi like Gigiri, Nyari, Kitisuru, Runda, Loresho, etc.

There could also be spill-overs to Riverside, Brookside and even Karen. I have seen some projections that property prices in these areas could go up by 15 per cent; other projections talk of 20 per cent.

The unvarnished truth is that the demand for high-security and well-managed residential properties is expected to increase exponentially.

If you are thinking of disposing of any property in these areas, you'd better hold on because you are about to be smiling at the bank.

This will also mean the displacement of some people who are living in these areas since they won’t be able to keep up with the rising property costs – it is a tough ‘kasongo’ economy, remember.

I see this displacement causing a subsequent property price increase in areas like Westlands, Kileleshwa and Kilimani.

It doesn’t stop there, gentrified areas like Ruaka will also take a property price hike hit.

A lot of this C-suite personnel will need services; talk of drivers, chefs, etc.

These people will need to reside closer by. This will inevitably result in residential price increases around what I would call support towns like Ruaka. 

This price increase won’t be reserved solely for residential properties.

Prices for commercial spaces will increase as well. The relocation of these offices will most definitely result in the attraction of some multilateral partners and NGOs.

There is going to be an obvious need to support the UN operations. This will result in more demand for Grade A offices, hence their price increase.

It is not all gloom, on the flip side, commercial malls like Village Market, Two Rivers and Roslyn Riveria are about to rip big time.

I asked the head of business development and marketing at Village about what they are doing to position themselves for this, and without going into details for obvious reasons of giving their competitors tips, they are carefully preparing for this.

What I shudder at is the infrastructure in these areas. There is an urgent need for the improvement of every bit of infrastructure in these areas; talk of re-grading of roads, expanding storm water drainage and water lines, installing streetlights, etc.

I am hoping that both the national and county governments are already collaborating in addressing these issues.

We cannot have the UN Avenue flooding like it did last year – we cannot. We have a problem, though some won’t see it that way. I see it as both – we have both a problem and an opportunity.

When it always matters most, we have a unique tendency to drop the ball as a country.

I am sanguine that we can act out of character and take advantage of this relocation.

Talking of acting out of character – I am ecstatic about this. 

The writer is a Construction & Real Estate Expert