Before the Boom: How to Read a Place’s Next Chapter

Benard Ojwaya is General Manager of GulfCap Real Estate (GCRE).

The billboard goes up before the road does. It stands at the edge of a murram track somewhere beyond the last matatu stage, red letters on white: Prime plots. Title deeds ready. Ten minutes from the highway. By evening the same promise has travelled through a dozen WhatsApp groups, and a family in Nairobi is doing sums on the back of a school fees receipt.

Now drive an hour north-west of Nairobi, down the escarpment to Mai Mahiu. There is no billboard here worth remembering. What you notice instead are the trucks. Containers that left Mombasa by rail come off the Standard Gauge Railway at the Naivasha Inland Container Depot and roll out onto the highway. Not far away, the Olkaria fields produce more than 1,000 megawatts of geothermal power. On land set aside as the Naivasha Special Economic Zone, steel and logistics firms have begun taking out licenses.

You are standing in a place that is acquiring momentum. The plot under the billboard may only be acquiring a price.

That difference is what this article is about. In every growing town there is a moment when its economic engine starts to turn over, long before the market notices. Kenya’s next growth frontiers will not be decided by how far the city spreads. They will be decided by where industry, transport, utilities and capable local government arrive together, and by whether the people who live there can afford to stay.

We have known about the gap for a decade. The World Bank’s Kenya Urbanization Review (2016) found that investment in network infrastructure was failing to keep up with demand in Kenyan towns, that Nairobi’s built-up area was growing faster than its population, and that roughly 60 per cent of urban households lived in housing that would be classed as a slum. Electricity and mobile connectivity have since reached much further than anyone expected. Trunk water, sewerage and drainage have not. The same Review found that about 70 per cent of urban residents relied on septic tanks and pit latrines, and across much of the urban fringe that is still the default.

So where does lasting value come from? It comes from places where power, water and transport are delivered at the same time. There are three signals worth watching. A Road Through a Place Is Not a Road That Builds It

New highways, railway lines and interchanges change how people, goods and money move. But a road does not, on its own, raise the value of the land beside it. The real question is what new economic relationships the infrastructure makes possible, for whom, and at what running cost.

Anyone who has driven Nairobi’s Eastern Bypass has seen the alternative: shops, yards and showrooms strung along the road, many changing tenants every few years, many built before drainage, sewers or reliable power arrived. Planners call this ribbon development. It is a road passing through a place, not a road making that place more productive. Naivasha tells a different story, because several systems were lined up together. The Energy and Petroleum Regulatory Authority approved a preferential power tariff of KSh 5 per kilowatt-hour for industries in the zone (Business Daily, 10 February 2020). Freight arrives by rail at the inland container depot nearby. By December 2025, licences had been issued to firms (early entrants), with corporate tax set at 10 per cent for the first ten years (Kenya News Agency, 20 December 2025). Feasibility of the whole development notwithstanding, cheap power, rail freight and a tax regime each help on their own. Together, they cut the cost of doing business enough to anchor real jobs.

The Dongo Kundu Special Economic Zone in Mombasa shows the other half of the lesson. On paper it has everything: direct access to the port, about 3,000 acres, a completed bypass, and water and sewerage systems financed by the Japan International Cooperation Agency. On the ground, progress is slower. The zone’s first berth was 16 per cent complete in September 2026 and is not due until December 2028; of 94 investors who have expressed interest, four have started building (Jumuiya News, 11 September 2026). Investors cite unfinished access roads, power lines and water connections as the main reason many are still waiting (The Standard, 2026). Dongo Kundu may yet become the manufacturing base it was designed to be. But anyone who priced land there on the master plan alone has waited a long time.

For investors, the lesson is simple. Do not pay for nearness to a road. Pay for what the road, the power line and the water main make reachable once they are funded, built and switched on.

Follow What People Earn, Not How Many People Arrive

A growing population creates volume. Only productive economic activity creates purchasing power that lasts.

The Kenya National Bureau of Statistics (KNBS) Gross County Product 2025 report shows how concentrated that activity is. In 2024, Nairobi City County produced just over a quarter of the country’s economic output, and its output per resident, KSh 850,332, was close to three times the national average. Kiambu, Nakuru and Mombasa follow, each contributing roughly five per cent. Kenya’s economy is not spread across its map. It is gathered in a handful of working towns.

Look closer and the towns divide along a second line. The KNBS 2023/24 Kenya Housing Survey Basic Report found that 72.3 per cent of urban households pay rent, compared with 8.9 per cent in rural areas. The same survey found that 53.4 per cent of urban workers walk to work.

Those two numbers carry most of the social equity argument in urban development. A renter is exposed every month to rent rises, water bills and fares. And commuting has two costs: the out-of-pocket cost of the fare and the time cost of the journey. Walking removes the first only by raising the second. Picture a nurse who can only afford to rent an hour’s walk from the hospital. She pays in hours what she cannot pay in shillings and has less of both left for her children. A development that lets her live near her work does more for her household than any discount on the unit price.

People respond to this. When jobs and services are unevenly spread, households move toward the places that give them better value for their time and money. It is the most honest market signal we have and over time, it decides which towns grow and which stall.

So, the question is not which town will become “the next Nairobi”. It is what each town can become on its own terms. A farm-produce collection centre needs cold storage and freight links. A regional business hub needs hospitals, housing for professionals and public spaces. Development holds its value when it answers those specific needs.

Local government decides whether a place keeps working

A building can be beautifully designed and still fail the people in it if the systems around it break down.

The Kenya Urban Support Program, financed by the World Bank with US$300 million between 2017 and 2023, is a useful test case. It paid for urban roads and walkways, storm-water drainage, solid-waste management, street lighting, markets and public parks across 59 municipalities in 45 counties. Crucially, the money was tied to setting up municipal boards and town plans. The design was deliberate: infrastructure was funded alongside the institutions that would have to run and maintain it.

Without that coordination, dense housing quickly turns into isolated pockets of concrete: chronic water shortages, poor access and rising service charges, falling hardest on the tenants least able to absorb them. The Kenya Urbanization Review made the same point a decade ago. It treats housing and basic services, land use and transport, planning, municipal finance and local economic development as parts of one problem, not six separate ones.

What this means for how we build

This is the discipline we hold ourselves to at GulfCap Real Estate (GCRE). Before we commit to any location, we ask six questions. If we cannot answer them honestly, we do not build there, however attractive the asking price looks.

Connectivity: Is the planned infrastructure funded and under construction, or still a line on a master plan?

• Economic engine: Which employers, institutions or industries will sustain local jobs after the builders leave?

• Infrastructure readiness: Can the water, power, sewer and drainage networks carry the development when it is fully occupied?

• Planning and governance: Are titles verified, environmental limits mapped, and the intended use in line with the county’s urban plan?

• Real demand: Is demand backed by verified incomes and local economic activity, or mainly by hopes that land prices will rise?

• Long-term viability and fairness: Will the place still work, and still be affordable to the people it was built for, ten to twenty years after handover?

  
  

We are not in the business of arriving first. We are in the business of arriving right.

That is why GCRE spends more time studying a place than selling it. A plot is only worth what the place around it can sustain. We would rather tell an investor “Not yet” than sell them a billboard.

Kenya’s urban future will not be built by developers working alone. It will be built where public infrastructure, productive enterprises, capable county governments and the daily needs of ordinary households meet.

For investors, this means looking past the asking price to the conditions that sustain value. For developers, it means understanding the place before designing the product. For county governments, it means lining up roads, water, land use and public services so that private investment adds to the prosperity of the whole town, not only the gated part of it.

Go back to the billboard on the murram road. One day the road may come, and the water, and the jobs, and the plot will be worth what was promised. Or it may not. The signals are there to read long before the market reads them: a new connection, a growing cluster of businesses, a water main that reaches the last house. Spotting them is only the beginning. The real work is understanding how they fit together and building places where people can live close to the work that sustains them.