Real Estate Market Maturity And Attractiveness In Rwanda And Kenya – International Investors’ Perspective

PURPOSE: This paper studies the maturity and sophistication level of institutional real estate markets in Kenya and Rwanda, their determinants independently and in relation to one another.DESIGN/METHODOLOGY/APPROACH: The study reports the findings of an interview study conducted among market participants in Kenya and Rwanda as well as in other East African countries targeting investments in the two researched jurisdictions.FINDINGS: The study identifies six main determinants for market maturity and sophistication level. It concludes that the two markets have very different drivers of attractiveness for international institutional investor when measured by the six determinants. Of the determinants some increase the attractiveness universally, such as title security, but with some the relative interaction plays a more important role as is the case for example with the relative interaction of investor protection in combination with perceived political stability.RESEARCH LIMITATIONS/IMPLICATIONS: The paper analyses the maturity and sophistication of Kenya and Rwanda only without drawing parallels to other East African countries that are often analyzed together with the paper’s research target countries by the international investors when making allocation decisions.PRACTICAL IMPLICATIONS: The study indicates that both, Kenya and Rwanda have many determinants of maturity already at the required institutional grade levels, but the interaction component between the determinants may possibly lower the global allocations to Kenyan and Rwandese property markets.ORIGINALITY VALUES: East African real estate market is currently amongst the most interesting markets for international real estate investors. Yet, it receives very little direct or indirect investment due to the existing information gap. This study seeks to fill some of this gap and lays the framework for further research.