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Published May 25, 2025
05 - minute read

Kenya’s Wealthy Turn to Income-Producing Investments: REITs, Bonds Lead the Way

In 2024, Kenya's high-net-worth individuals (HNWIs) are strategically reallocating their investments, moving away from lifestyle assets towards income-generating ventures.

This shift is driven by economic uncertainties and a desire for more stable, long-term returns.

Decline in Lifestyle Investments

The Knight Frank Wealth Report 2025 highlights a significant reduction in wealth allocated to personal residences among Kenyan HNWIs. The proportion dropped sharply from 60% in 2023 to just over 20% in 2024. Additionally, the percentage of HNWIs owning four or more homes decreased from 37.5% in 2023 to 22.2% in 2024.

Embracing Income-Generating Assets

Kenyan millionaires are increasingly channelling their wealth into sectors that offer stable, long-term returns. Preferred investment avenues now include:

  • Real Estate Investment Trusts (REITs): Providing exposure to income-producing real estate without the need to directly manage properties.
  • Treasury Bonds and Money Markets: Offering predictable returns and lower risk profiles.
  • Agriculture and Renewable Energy: Investments in food production and sustainable energy projects are gaining traction.

This strategic pivot reflects a broader economic reality where long-term returns and domestic confidence take precedence over ostentatious lifestyle purchases.

Factors Influencing the Shift

Several factors contribute to this investment transformation:

  • Economic Considerations: Rising land and construction costs, coupled with low mortgage penetration in Kenya, deter investments in luxury residential properties.
  • Taxation and Regulatory Environment: Domestic and global tax concerns influence investment decisions, prompting a move towards assets with more favorable tax implications.
  • Entrepreneurial Wealth: A majority of Kenya’s wealthy are entrepreneurs, with less than 40% of their wealth coming from inheritance. This entrepreneurial mindset drives a focus on investments that offer growth and income generation.

Emphasis on Sustainability and Local Investments

Sustainability is becoming a priority, with the affluent investing in energy-efficient upgrades and reducing their carbon footprint. Data centers and development land are identified as top investment choices for 2025, along with sectors like farmland, hotel and leisure, logistics, and office spaces. Furthermore, 66% of HNWIs now favor Kenya as their first option for property investment, up from 33% last year, indicating a growing confidence in the local market.

This transition from consumption to conservation underscores a new era of financial prudence among Kenya's wealthy, where long-term, income-generating investments are prioritized over lifestyle assets.