Rent in Africa: Where Dar es Salaam stands

Dar es Salaam still has the highest rents for residential houses compared to other cities like Johannesburg, Nairobi, Kigali, and Cape Town—so far the city has been ranked 18 out of 35 cities surveyed in Africa for 2015.

Global property service company, Knight Frank, did the survey whose findings were released last month.

Dar es Salaam charges US$21 per square meter for office space, US$30 per square meter for retail space and US$5 per square meter for industrial space.

According to the report, Kigali is the most expensive city in the region for office rent at US$25 per square meter, followed by Nairobi at US$21 per square meter and Kampala charges US$17.

The most expensive cities in Africa are Luanda, which charges US$150 per square meter, Lagos US$65 per square meter and Abuja at US$60. The rates in Luanda are very expensive because of high inflation caused by a booming oil economy.

Luanda is the most expensive city in the world along with Tokyo and Geneva.

Johannesburg, the financial hub of Africa, has the lowest rent rate, charging US$22 per square meter for office space. South Africa is estimated to have between 15 and 22 million square meters of office space, while the rest of Africa has only five million square meters.

South Africa is by far the most mature retail market on the continent, and the sector continues to see significant development activity.

There are several major shopping centres in the pipeline, the largest of which is the Mall of Africa— at 120,000 sq. m—being built as part of the Waterfall City development, situated between Johannesburg and Pretoria.

For retail spaces like shopping malls, Dar es Salaam still has the best rent rates compared to other cities like Nairobi, Johannesburg, and Lusaka.

According to the Knight Frank report, Dar es Salaam charges US$30 per square meter for retail space, while Nairobi has a rate of US$40 per square meter and Johannesburg charges US$60 per square meter.

Both Kigali and Kampala charge US$25 per square meter, trailing Dar es Salaam and Nairobi in retail spaces.

In the past few years, Dar es Salaam has recorded robust growth in commercial properties with heavy investments being undertaken mainly by pension funds and the National Housing Corporation (NHC).

Citing residential rents especially in highly developed posh areas, the survey found that a three-bed room fully furnished apartment costs US$5,000 a month, while the same costs US$4,500 in Johannesburg, US$4,700 in Nairobi, US$2,500 in Kigali and Kampala in US$4,000.

Another thorn on the side of Dar es Salaam tenants is that while in many countries residential rents are paid for one to three months maximum, here rent is paid annually, bar for the exceptional cases where tenants pay six months’ rent.