An apartment feasibility study in Kenya answers one question before you spend millions: will this building pay for itself, and how fast? Many stalled rental blocks around our towns were started on a hunch about demand and a rough cost per floor. A few days of honest numbers at the start can save years of financial pain.

This guide walks you through the feasibility checks we recommend to developers and landlords, with a worked example using published construction rates. If you are new to apartment development, start with our apartment construction in Kenya beginner guide and come back here when you have a plot in mind.

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What an apartment feasibility study in Kenya should cover

A useful feasibility study is not a thick report. It is a set of checks, each of which can stop the project or change its design:

• Market: who will rent here, what unit types they want and what they actually pay.
• Site and planning: what the zoning allows (use, height, plot coverage), access, water, power and sewer.
• Design: how many units of which size fit on the plot after parking, stairs and setbacks.
• Cost: construction, land, approvals, professional fees, utilities and a contingency.
• Finance: how much is your own money, how much is borrowed, and what it costs.
• Returns: rental income, vacancy, running costs, yield and payback period.
• Risk: what happens if rents are lower, costs higher or the build takes longer.

Step 1: Test the rental market on the ground

Do not rely on asking rents in online adverts. Walk the area, visit similar blocks, talk to caretakers and agents, and note the rent, the unit type and how many units are empty. Ask how long a vacant unit usually stays empty. Near colleges, demand may favour bedsitters and one-bedroom units; near offices and hospitals, two-bedroom units may let faster. Write down at least five comparable buildings before you choose a unit mix.

Step 2: Check what the plot allows

County planning rules decide how many floors and how much plot coverage you can have. Apartment projects also need approvals beyond the building plan. Our guide to approvals needed before building apartments in Kenya lists them. Environmental licensing is handled by the National Environment Management Authority (NEMA), which issues environmental licences and permits; build the time and cost of this into your plan rather than treating it as a last-minute step.

Step 3: Fit the design to the plot

An architect or design-and-build team turns the plot rules and your chosen unit mix into a concept layout: number of floors, units per floor, stair and corridor space, parking and a water tank position. This is where the gross floor area comes from, and that number drives the cost. If you want to see what a standard layout looks like before paying for a custom one, our apartment plan for 1 and 2 bedroom units is a useful reference.

Step 4: Estimate the total project cost

For a first estimate, multiply the gross floor area by a published rate. Integrum’s 2025 construction cost rates give KSh 61,610 per m² for a standard low-rise apartment block in Nairobi and KSh 66,510 per m² in Western and Nyanza. Integrum calls these indicative planning figures. Then add everything the rate does not include:

• Land (or its current value if you already own it)
• Approvals and statutory fees
• Professional fees (architect, structural engineer, quantity surveyor)
• Water, power and sewer connections, borehole or tanks
• External works: parking, drainage, perimeter wall, gate
• Finance costs during construction
• A contingency for price changes and surprises

Worked example: a 12-unit block

The example below uses Integrum’s Western and Nyanza rate. The land price and rent are illustrative assumptions only, to show the method. Replace them with the land value and rents you have checked yourself.

Item	Assumption	Amount (KSh)
Building	800 m² gross floor area × 66,510	53,208,000
Land	Illustrative value	6,000,000
Total (before fees, external works and contingency)		59,208,000
Gross rent	12 two-bedroom units × 22,000 × 12 months	3,168,000 a year
Gross yield	3,168,000 ÷ 59,208,000	about 5.4%
Rent after one empty month per unit	3,168,000 × 11/12	2,904,000 a year (about 4.9%)

Two lessons come out of even this simple example. First, the yield falls further once you add fees, external works, contingency and running costs (caretaker, security, repairs, water, management), so check the net figure, not the gross one. Second, the payback period on the gross rent alone is close to 19 years. That is why the unit mix, rent level and construction cost per m² matter so much: a design that fits two more units on the same plot, or a rent that is a few thousand shillings higher, changes the result a lot.

Step 5: Plan the finance and the phasing

List where every shilling comes from: savings, sale of another asset, a bank or SACCO loan, or a partner. Lenders will usually want a valuation of the land and the proposed building, so it helps to understand property valuation in Kenya before you approach them. If the money comes in tranches, plan the phases so that each one leaves the building safe and weather-tight. Our guide on how to budget for apartment construction in Kenya covers cash-flow planning in more detail.

Step 6: Stress-test the numbers

Run the same spreadsheet three times: expected case, a bad case (rents 15% lower, costs 10% higher, two empty months a year) and a good case. If the bad case means you cannot service the loan, change the design, the unit mix or the financing before you break ground.

Watch: apartment designs that keep occupancy high

Common feasibility mistakes

• Copying the unit mix of a building in another town without checking local demand.
• Using cost per floor from a friend’s project instead of cost per m² from your own design.
• Forgetting parking, water storage and drainage, which take plot space and money.
• Leaving out finance costs and the months with no rent while units fill.
• Assuming 100% occupancy from the first month.

For a full cost breakdown by stage, see the cost of building apartments in Kenya. If your plot is in Kisumu, our sister site has a guide to the cost of building an apartment in Kisumu.