Where super-wealthy Kenyans want to invest

Kenya’s super-wealthy plan to invest their fortunes in special homes for the elderly and data centres this year, a new survey shows.

This marks a departure from real estate, which has traditionally been the investment of choice for the Ultra High Net Worth Individuals (UHNWI). 

The 2022 Knight Frank Wealth Report indicates that Kenyans with a net worth of more than Sh3.4billion prefer investing in the two sets of assets for long-term returns.

“Assisted living for the elderly has not been common in much of Africa, but we are currently seeing a substantial investment in this sector as the concept catches on,” Mr Ben Woodhams, head of Knight Frank’s Africa desk, said.

Long-term assisted living centres have become a global craze amid growing uncertainty about health threats such as the Covid-19 pandemic.

The demand for assisted living centres for the elderly has particularly risen sharply over the past two years, after this segment of the population was hit the hardest by the Covid-19 pandemic. 

The health crisis triggered demand for more space due to social-distancing rules, which meant that existing amenities had to take in fewer people.

At the height of the pandemic, the world witnessed disturbing scenes where parking lots and other open spaces were turned into makeshift homes for the elderly.

Magnet for investors

The latest edition of the Knight Frank Wealth Report also shows that the UHNWI are also betting on information technology for long-term returns.

“We also expect data centres to be developed close to the geothermal springs of the Great Rift Valley, with the power-hungry facilities making use of the geothermal energy produced by volcanic activity in the region,” Mr Woodhams said.

Data centres have been a magnet for investors amid an expected global boom in online services. Working remotely and e-commerce have led to higher data consumption, shoring up demand for more data centres globally.

The rise of Olkaria as a preferred site for data centres could be linked to affordable and sufficient power, as the centres are electricity guzzlers.

The government targets to create a Special Economic Zone (SEZ) around the Olkaria geothermal field in order to woo investors with discounted electricity tariffs.

Businesses in SEZs pay a lower power tariff of Sh5 per unit, which is significantly lower than the normal tariff. The Energy and Petroleum Regulatory Authority last month revealed that no industry had set up shop at the Olkaria-Kedong SEZ in Naivasha.

The state has dangled tax incentives for investors in the SEZs, including exemption from stamp duty, supply of taxable goods and services into the zones, as well as lower corporate tax.

Taxation remains a sensitive matter for investors. The Knight Frank report shows many rich Kenyans are seeking a second nationality to boost their access to markets with favourable taxes and quality healthcare and education.

“Among Kenyans seeking new passports, the proportion interested in reducing their tax bills, enhancing their safety, or getting a better quality of life is much the same as for the wealthy globally,” Andrew Shirley, editor of The Wealth Report at Knight Frank, said.

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