Nairobi — Wealthy Kenyans ramped up their investments in rented residential and retail properties and reduced their positions in industrial property and development land as they sought better returns in 2022, a new survey shows.
The 2023 attitudes survey by Knight Frank noted that Kenyan High Net Worth Individuals (HNWIs) held a greater proportion of their investment portfolios in property and bonds than was the norm globally in 2022.
The survey notes that as energy prices and inflation rocked markets worldwide last year, most Kenyan HNWIs moved to increase their positions in property, with the proportion of HNWIs owning private rented property rising from 44 per cent to 70 per cent, and the proportion owning retail properties rising from 41 per cent in 2021 to 70 per cent in 2022.
At the same time, only 25 per cent of the wealth managers for Kenyan HNWIs reported their clients remained invested in logistics and industrial properties, compared with 44 per cent a year earlier.
"The attitudes survey revealed Kenyan HNWIs now hold a far higher proportion of their wealth in property and bonds than the global average for HNWIs. This is playing a critical role in social provision, funding government borrowing, and driving the growth of low-cost housing schemes, rented homes, shops, food, healthcare, and education development," said Mark Dunford, CEO Knight Frank Kenya.
In terms of portfolio balance, property, and bonds accounted for 66 per cent of Kenyan HNWI's holdings in 2022, while only 18 percent of their assets were held in stock market equities and just 5 percent in venture capital.
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This contrasted with a global position, where HNWIs worldwide held an average of 26 percent of their assets in stock markets in 2022, and 9 percent in venture capital and private equity.
Kenyan wealth managers also reported that private rented property, likewise, dominated their clients' investment plans for the year ahead, with 60 percent planning to invest in private rentals, followed by 50 percent in retail.
"The property balance in Africa and Kenya's portfolio mix, and the reduced exposure to equities and venture capital, served in 2022 to make African investments far more resilient, in sectors that were not immediately impacted through reduced profits from the surges in energy prices, and input inflation," said Liam Bailey, Global Head of Research and Editor-in-Chief of The Wealth Report at Knight Frank.
"As a result, nearly two-thirds of Kenyan and African HNWIs increased their wealth in 2022, compared with only 40 percent of global HNWIs."
