Serviced Apartment in Nairobi: A Complete Investor’s Guide

Serviced apartments in Nairobi have grown into one of the most lucrative property segments for investors, blending the benefits of residential housing with the flexibility and higher income potential of hospitality. With the city serving as East Africa’s financial hub and hosting thousands of multinational companies, NGOs, and expatriates, demand for serviced apartments in Nairobi continues to expand.

Contents hide

1 Understanding the Serviced Apartment Market in Nairobi

2 Why Investors are Choosing Serviced Apartments in Nairobi

3 Income Potential: What to Expect

4 Market Benchmark

5 How to Maximise Income from Serviced Apartments in Nairobi

6 Risks and Challenges

7 Final Word: Is a Serviced Apartment Worth It in Nairobi?

8 Call to Action

But what kind of income can you expect from a serviced apartment? How do returns compare to long-term rentals, and what are the risks? This guide breaks it all down — from market data and income potential to smart investment strategies — with a special focus on Nairobi’s most promising suburbs.

Understanding the Serviced Apartment Market in Nairobi

A serviced apartment in Nairobi is a fully furnished unit rented out for short-, medium-, or long-term stays. Unlike traditional apartments, they come equipped with utilities, internet, housekeeping, and sometimes concierge services. They’re popular with business travellers, relocating families, consultants, and even local tenants who prefer flexible stays.

The model blends real estate with hospitality, meaning you can charge a premium rental income compared to unfurnished apartments. According to property market surveys, average occupancy for serviced apartments in Nairobi hit 72.2% in 2024, while yields averaged 7.3% — higher than many conventional rentals.

Why Investors are Choosing Serviced Apartments in Nairobi

Higher Rental Income Premiums
Furnished and serviced apartments in Nairobi command 20–40% more rental income than unfurnished long-lets in the same area. Tenants pay for the convenience of ready-to-move-in units with WiFi, utilities, and cleaning services.
Multiple Revenue Streams
You can operate a unit as:
- A long-term furnished rental (steady income).
- A short-term rental on Airbnb/Booking.com (higher nightly rates).
- A hybrid model targeting corporates for mid-term stays.
Steady Corporate Demand
Nairobi is home to multinational firms, UN agencies, and regional offices. Corporations often house consultants and relocating staff in serviced apartments, ensuring reliable mid-term occupancy.
Resilience Against Market Shocks
While traditional rental income is tied to lease renewals, serviced apartments benefit from diversified demand (corporates, expats, tourists, locals), which can stabilise cash flow.

Income Potential: What to Expect

Long-Term Furnished Rental Model

Monthly Rent (1-bedroom in Kilimani/Westlands): KSh 35,000–50,000.
Annual Gross Income: KSh 420,000–600,000.
Yield Estimate: 4–6% (depending on purchase price).

This model offers stability and lower management costs, but yields are often lower compared to short-term serviced rentals.

Short-Term Serviced Apartment Model

Average Daily Rate (ADR): US$40–45 (≈ KSh 6,000).
Occupancy: 50–65% in prime areas.
Annual Gross Income: US$8,000–12,000 (≈ KSh 1.2–1.8M).
Yield Estimate: 6–9% before costs.

Short-term rentals can double gross revenue versus long-lets, but they require professional management, cleaning, and marketing.

Market Benchmark

Across Nairobi, average yields for serviced apartments stood at 7.3% in 2024, confirming their stronger earning power compared to traditional rentals.

Key Costs That Reduce Net Income

Management Fees: 10–30% of rental income, depending on whether you hire a property manager.
Service Charges: Monthly service fees can range from KSh 5,000–15,000 depending on the building.
Utilities & Internet: Usually included in rental rates, making them a recurring cost for the investor.
Furnishing & Maintenance: Initial furnishing can cost KSh 500,000–1M for a quality 1-bed unit, with ongoing replacements every 3–5 years.
Vacancy Periods: Seasonality and oversupply can lower occupancy, especially in low-demand months.

Top Locations for Serviced Apartments in Nairobi

Westlands – Popular with corporates and expats; close to business hubs and lifestyle amenities.
Kilimani – Strong demand from middle- to upper-income tenants; attractive to both corporates and leisure travellers.
Kileleshwa – Quieter residential feel, yet still popular with long-term and corporate clients.
Upper Hill – Nairobi’s financial hub; strong demand from consultants and international firms.
Lavington & Riverside – Premium serviced apartments appealing to high-end corporates and expatriates.

How to Maximise Income from Serviced Apartments in Nairobi

Choose the Right Operating Model
If you prefer stability, focus on corporate mid-term contracts. If you want higher upside, embrace short-term stays with professional Airbnb management.
Furnish Smartly
Durable, stylish, and easy-to-maintain furniture improves guest experience and reduces replacement costs.
Leverage Professional Management
Companies specialising in serviced apartments can optimise pricing, improve occupancy, and handle cleaning/maintenance — freeing you to focus on growth.
Adopt Hybrid Pricing
Use dynamic pricing tools to adjust nightly rates based on demand. Blend long-term corporate bookings with short-term high-yield stays.
Market Beyond Airbnb
Build relationships with relocation agencies, embassies, and corporates who often need bulk or long-term serviced accommodation.

Risks and Challenges

Oversupply: Rapid development of apartments in Kilimani and Westlands risks flooding the market.
Regulation: Short-term rentals may be subject to stricter county licensing in the future.
Management Quality: Poor service can kill reviews and reduce occupancy.
Economic Uncertainty: Currency fluctuations and reduced travel budgets can impact demand.

Investor Checklist Before Buying a Serviced Apartment in Nairobi

✅ Verify market rents and occupancy in the specific neighbourhood.
✅ Factor in management and service charges.
✅ Model conservative (50% occupancy) and optimistic (70% occupancy) scenarios.
✅ Secure professional management before listing the property.
✅ Check building rules — some developments restrict short-term rentals.

Final Word: Is a Serviced Apartment Worth It in Nairobi?

Yes — but only if you choose the right location, manage the unit professionally, and set realistic expectations. With average yields of around 7.3%, serviced apartments in Nairobi outperform traditional rentals. However, success depends on execution: strong furnishings, excellent management, and targeting the right tenant base.

For investors looking to maximise serviced apartment income in Nairobi, the model offers a balance between steady corporate demand and the high nightly rates of short-term rentals.

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Call to Action

If you’re considering investing in serviced apartments in Nairobi, partner with experts who understand the market inside and out. Marble Engineering and Construction Ltd specialises in developing and managing high-quality serviced apartments tailored to Nairobi’s corporate and expatriate markets.

Whether you want to build, convert, or manage a serviced apartment, Marble Engineering and Construction Ltd is your trusted partner for maximising rental income.

Contact Marble Engineering and Construction Ltd today to turn your property investment into a reliable income stream.