Kenya’s super-rich are changing their investment habits, with a growing preference for art, jewellery, and expensive alcohol compared to luxury cars, according to Knight Frank’s Wealth Report 2024.
The Wealth Report 2024 shows that 70% of Kenyan high-net-worth individuals (HNWIs) now favour art, up from 50% in 2023. This aligns with the global trend of art as a top-performing asset class, boasting an 11% price increase in 2023.
“The resilience of the art market in the face of broader economic fluctuations further underscores its appeal as a tangible and culturally rich asset class,” says Knight Frank CEO Mark Dunford.
Diversification in Real Estate
While homes remain the top holding (60% of wealth), there’s a shift towards local properties. Fewer are investing abroad (10% vs 14% in 2023). This trend aligns with Kenya’s economic growth, attracting investment back home.
While interest in commercial property remains subdued, investments in farmland (77.5%), hotels and leisure (69.4%), and rental properties (58.6%) are gaining traction. Student housing (52.7%) is also emerging as an attractive option.
“The majority of respondents identified investment as the primary motivation behind the home purchases, a strategic choice highlighting a deliberate effort among rich individuals to view residential real estate as a lifestyle asset and a robust investment vehicle,” notes Boniface Abudho, Analyst at Knight Frank.
He notes, “Factors such as legacy and inheritance planning, wealth appreciation, diversification of investments, and income generation motivate the rich to invest in residential real estate.”
What is Driving the Shift
Global economic turmoil is prompting wealthy Kenyans to focus on domestic investments, reducing interest in foreign assets and second passports.
“The shift in assets has also seen a drop in interest by HNWIs in second passports, with almost a third of wealth managers reporting that none of their clients were now interested in another passport or citizenship, and another third reporting that fewer than 10% were,” according to Dunford.
The International Monetary Fund (IMF) forecasts Kenya’s GDP to grow by 5% in 2024, exceeding global and developing economy averages. This growth is attracting investments back into the country.
Kenya ranks among Africa’s top five wealthiest markets, with an estimated 7,200 millionaires concentrated in Nairobi (4,400). Despite a slight decrease from 7,700 in 2022, Kenya’s HNWI population remains significant.
“Kenya’s growth is bringing a resurgence in HNWIs buying Kenyan property. This includes second and third homes in addition to their commercial property investments. Wealthy investors have also taken a step back from foreign assets in favour of building bigger positions at home,” said Dunford.
