Kenya’s Wealthy Shift Focus: Moving Away from ‘Lifestyle’ Investments
In a surprising turn of events, Kenya’s affluent citizens are redefining their investment strategies. Departing from traditional avenues such as luxury homes abroad, they are now gravitating towards local, income-generating opportunities.
The Changing Landscape of High-Net-Worth Investments
Recent insights from a Knight Frank report unveil this trend, highlighting a significant shift in the preferences of Kenya’s wealthy elite. As the allure of foreign luxury diminishes, there is a renewed enthusiasm for investments that not only promise returns but also contribute positively to the local economy.
Signs of Caution: Slowing Wealth Growth
While the number of high-net-worth individuals (HNWIs) continues to rise in Kenya, the rate of wealth expansion has dramatically slowed since 2024. Wealth managers report an increase of less than 10 percent in HNWIs heading into 2025. Even in this climate of caution, there is a palpable confidence in the burgeoning local investment landscape.
Expert Insights: Diversification Is Key
Boniface Abudho, a Research Analyst at Knight Frank, notes, “Investors are now attempting to diversify their investment portfolios, moving from conventional residential properties to alternative assets like Real Estate Investment Trusts (REITs) and financial instruments such as Treasury bonds and Money Market Funds.”
The staggering drop in the share of wealth tied up in homes—from 60 percent in 2023 to just over 20 percent in 2024—underscores this trend.
Foreign Ownership Declines
The international allure doesn’t seem as attractive anymore. Only one in ten high-net-worth individuals in Kenya possess property abroad, a stark contrast to previous trends where owning foreign homes was a status symbol.
Contributing Factors to the Decline:
- Low mortgage penetration in the country.
- Rising land and construction costs.
- Concerns surrounding domestic and global issues, including tax implications.
A New Generation of Entrepreneurs
Another layer to this narrative is the entrepreneurial spirit amongst Kenya’s wealthy. Inherited assets contribute less than 40 percent of most HNWIs’ wealth, emphasizing the rise of self-made millionaires who are actively building their fortunes. Abudho asserts, “Though many of the wealthy individuals begin with nothing, a significant portion begins from scratch.”
Investment Opportunities for 2025: What’s Hot?
As we look ahead, the report identifies lucrative areas for investment in 2025. Data centres, development land, farmland, and logistics are topping the list of choices, while sectors like hotel and leisure, and office spaces are also attracting keen interest.
Sustainability at the Forefront
Moreover, a stronger focus on sustainability is emerging, with the elite investing in energy-efficient upgrades and methods to reduce their carbon footprint. This shift highlights a growing commitment to environmental responsibility, aligning wealth creation with ecological mindfulness.
Mark Dunford, CEO of Knight Frank, expresses optimism about the future: “We anticipate almost 50 percent of clients’ wealth to increase in 2025, reflecting a more hopeful outlook compared to 2024.”
Investments of Passion: Art and Classic Cars
While the wealthy continue to prioritize financial gains, the allure of investing in art and classic cars remains strong. These assets not only represent a form of wealth storage but also connect individuals to their passions.
In conclusion, the evolving investment landscape in Kenya suggests that the affluent are transitioning from traditional lifestyle choices to more strategic, sustainable investments that promise growth and community impact. As this trend unfolds, it reveals a dynamic interplay between luxury, local opportunity, and social responsibility—an exciting era for investors and the nation’s economy alike.
