Spatial Market Expansion and Real Estate Investment Performance in Nairobi County, Kenya

Abstract

Nairobi County’s real estate sector is undergoing rapid transformation driven by urbanisation within a highly transitional metropolitan environment characterised by core congestion, escalating land prices in areas such as Kilimani and Upper Hill, and increasing reliance on diaspora remittances and external capital inflows. This expansion reflects a shift in spatial development patterns, where infrastructural decentralisation toward satellite towns, diversification of property products, and intensified investor entry are reshaping investment dynamics. This study sought to find out the influence of market expansion on real estate investment performance in Nairobi County, Kenya. This study adopted an embedded mixed-methods research design. The target population comprised 129 real estate investment firms in Nairobi County, from which 247 respondents were selected using stratified random sampling, alongside 30 purposively selected key informants. Data were collected using structured questionnaires and interviews. Quantitative data were analysed using descriptive and inferential analysis, while qualitative data were analysed using content analysis. . The study findings reveal that property market expansion has a significant positive influence on real estate investment performance in Nairobi County (R² = 0.553; B = 1.158; p < 0.01). Descriptive results further show strong agreement among respondents that key dimensions of market expansion, including investor participation, increased real estate supply, economic growth, and population dynamics, are actively driving the property market. These forces manifest physically through spatial outward growth into peri-urban zones, densification of the urban core, infrastructure-driven connectivity improvements, and product diversification into affordable housing, gated communities, and mixed-use developments. The study concludes that property market expansion significantly enhances real estate investment performance in Nairobi County. Increased investor participation, expanding property supply, and strong economic and population growth contribute to rising property values and greater investment activity. The study recommends that effective planning, regulatory oversight, and balanced housing supply are necessary to ensure sustainable real estate investment performance in Nairobi County.