Grand Premier, Lavington: the one bedroom yields 11 percent and the three bedroom yields 6

Two lines from the same price list. A 75 square metre one bedroom: KES 8 million to buy, KES 75,000 a month to let. A 175 square metre three bedroom with staff quarters: KES 23 million to buy, KES 130,000 to let. Nearly three times the price for under twice the rent. Everything an owner needs to decide here is in that comparison.

What the building actually is

A completed development on Argwings Kodhek Road in Lavington, ready for occupation, running from one bedroom apartments up to a four bedroom penthouse with staff quarters. Bright open plan living, expansive balconies, European style fitted kitchens with Bosch appliances, all bedrooms en suite on the larger layouts, and separate domestic staff quarters on selected units.

Facilities are led by a rooftop heated swimming pool and a rooftop lounge deck, with a fully equipped gym, landscaped gardens, a children’s play area and a mini market within the development. The services underneath are a full backup generator, solar water heating, a borehole, biometric lift locking with video intercom, CCTV around the clock, an electric fence with razor coil and manned gates.

Position is quiet Lavington with access to Lavington Mall, the Junction, Valley Arcade and Yaya Centre, and onward to Kilimani, Kileleshwa, Riverside, Westlands and the city centre. The case for the neighbourhood is in the complete guide to Lavington.

What does an apartment at Grand Premier rent for?

• One bedroom, 73 to 78 sq m. KES 75,000 a month, sale from KES 8 million
• Two bedroom, all en suite, 113 to 140 sq m. KES 90,000 to 100,000, sale KES 17 million
• Three bedroom plus DSQ, 175 to 183 sq m. KES 120,000 to 140,000, sale KES 23 million
• Four bedroom penthouse plus DSQ. Sale KES 40 million

Note the one bedroom properly, because it is unusual. At 73 to 78 square metres it is larger than many Nairobi two bedrooms, and at least one listing describes it as a one bedroom plus DSQ. A one bedroom with a staff quarter and nearly 80 square metres is a different product from the 45 square metre studios that dominate this end of the market.

The yield ladder runs backwards

Why does the one bedroom yield so much more than the three bedroom?

Run each layout through the same sum.

• One bedroom. KES 75,000 a month is KES 900,000 a year. Against KES 8 million, a gross yield of about 11.3 percent
• Two bedroom. KES 90,000 to 100,000 is KES 1.08 to 1.2 million a year. Against KES 17 million, about 6.4 to 7.1 percent
• Three bedroom plus DSQ. KES 120,000 to 140,000 is KES 1.44 to 1.68 million a year. Against KES 23 million, about 6.3 to 7.3 percent

The one bedroom earns nearly double the yield of the three bedroom in the same building, with the same kitchen, behind the same gate.

The cause is simple and it is not a defect in this development. Sale prices in Lavington climb with floor area because floor area is what a developer builds and sells. Rents do not, because tenants pay for the address, the security, the pool and the number of bedrooms they need, and a tenant who needs one bedroom will not pay three times as much for three. The difference falls entirely on whoever buys the large unit.

We have seen the same thing across the buildings we manage in. A 1,640 square foot two bedroom in St Michael Garden Apartments lets for less than a 970 square foot two bedroom in a Westlands tower. At Denis Gardens the studios and one bedrooms sold out before the larger units. Square metres are the thing owners buy and the thing tenants decline to pay for, consistently, in every neighbourhood we operate in.

Which unit to own, and why it depends on you

Should I buy the small unit or the large one at Grand Premier?

The small one to invest, the large one to live in. Both are defensible purchases and the mistake is only ever to buy one while expecting the other’s economics.

The one bedroom at KES 8 million, letting at KES 75,000, is a strong yield proposition by Lavington standards and it is large enough to appeal to a couple or a professional who would otherwise be looking at a small two bedroom. It is the unit to own if the return is the point.

The three bedroom at KES 23 million, with all bedrooms en suite, a staff quarter and 175 square metres, is a family home in a good part of Lavington that also happens to let at a reasonable return. For a family buying somewhere to live, 6.5 percent is not the measure that matters, and the apartment is genuinely well specified for the price.

Where Lavington sits against the alternatives is in Lavington against Kileleshwa and why Lavington is overtaking Karen, and the citywide yield picture is in the best neighbourhoods for rental yield.

What to do if yours is sitting empty

1. Confirm whether your rent includes the service charge. One listing says it does and others are silent, and if yours is inclusive that is an advantage you should be advertising
2. Market the one bedroom as a small two. At 78 square metres with a staff quarter it competes against two bedrooms, not against studios, and pricing it as a studio leaves money behind
3. Photograph the rooftop pool and lounge deck. A heated rooftop pool is the thing this building has that the next Lavington block does not, and most listings list it rather than show it
4. Lead with Bosch and biometrics on the larger units. A family paying KES 130,000 is buying reassurance, and specific brands and specific security systems read as evidence where “modern finishes” does not
5. Target the schools. Lavington families choose a school and a home together, and almost nobody advertises to them directly

The general diagnosis is in why your Nairobi rental keeps going vacant, and how to set the number is in pricing a Nairobi rental.

If you are looking to rent here

Grand Premier is good value in Lavington, and most of all in the larger layouts. A 175 square metre three bedroom with every bedroom en suite, a staff quarter and a heated rooftop pool at KES 120,000 to 140,000 is a lot of apartment for this neighbourhood, and the borehole, generator and solar water heating mean the basics hold up.

Two things to establish. Ask whether the quoted rent includes the service charge, because listings differ. And ask the square metres rather than the bedroom count, since the two bedroom is advertised at anywhere between 113 and 140 square metres at a KES 10,000 spread in rent, and the larger one is plainly the better deal. If you want us to tell you what is genuinely available, find a home is where to start.

How Goldstay handles it

We manage long lets and short stays in Lavington, including in this building, and we sold nothing here, so there is no sales projection of ours to defend. We charge 10 percent of rent collected on a long let and 20 percent of revenue on a short stay, with no setup fee and no exit fee. At Grand Premier we will tell you plainly which yield band your layout sits in before you ask, because the gap between the one bedroom and the three bedroom here is wide enough that an owner should not learn about it from a statement.

If your apartment is empty, send it to us with the floor, the square metres and the layout and we will come back with an achievable rate and a straight view on the route. What long term management and Airbnb management each cover is set out in full.

Related reading: the complete guide to Lavington, Karen against Lavington for families and furnished or unfurnished.