Kampala and Dar es Salaam have extended their dominance over Nairobi in terms of yield on prime warehouse rents for the second successive year. According to a report by Knight Frank, a real estate firm, the average yield on rent of a prime warehouse in Nairobi stood at 9.5 percent in the first half of 2026, compared to 13 percent in Kampala and 10 percent in Dar es Salaam. This highlights the varying fortunes for investors in the industrial property segment across East African capitals.
The yields on rent for the first half of 2026 varied despite relatively similar charges across the three cities. Warehouse owners in Uganda demanded an average of Sh906.22 ($7) per square metre (PSM), Nairobi Sh776.76 ($6), and Dar es Salaam Sh647.30 ($5). Notably, the rent PSM for the three East African capitals remains unchanged from a similar period last year. This stability in rental charges is attributed to demand driven by tightening supplies of Grade A facilities and the repositioning of logistics networks.
In Nairobi, rental charges for prime warehouses have held steady year-on-year, driven by demand due to tightening supplies of Grade A facilities and the repositioning of logistics networks around the Kenyan capital and other key economic corridors. Knight Frank attributes this trend to continued investment in transport corridors, SEZs (Special Economic Zones), and logistics infrastructure, which is expected to reinforce Kenya’s position as a leading regional manufacturing and distribution hub.
Mark Dunford, CEO of Knight Frank Kenya, notes that the trend reflects a broader shift in investor appetite towards professionally managed, income-producing industrial assets with strong tenant fundamentals and long-term relevance to regional supply chains. This shift is crucial for understanding the dynamics in the industrial property market across East Africa.
In Tanzania, prime industrial rents remained stable at Sh647.30 ($5) PSM per month in the first half of 2026, with yields averaging 10 percent. The tracker indicates that average occupancy levels are at 70–75 percent, underpinned by steady demand from manufacturers, logistics operators, import-export businesses, and regional distribution companies. Industrial activity in Dar es Salaam continues to be concentrated along established logistics corridors.
Uganda’s prime industrial warehouse occupancy remained above 80 percent in the six months to June 2026, reflecting strong demand for modern industrial space. Prime yields of 12–13 percent position Uganda among the highest-yielding industrial markets tracked by Knight Frank. Demand for industrial warehouses in Uganda is driven by various sectors, including manufacturing, logistics, construction, mining, and energy-related occupiers.
Several structural trends are reshaping the industrial market in Uganda, reinforcing demand for modern, well-located industrial facilities capable of supporting long-term operational requirements. Cold-chain warehousing remains the most undersupplied industrial sub-sector, driven by increasing demand from the agriculture, pharmaceutical, and food distribution industries. Lease tenures are lengthening for strategically important occupiers, particularly in anticipation of sustained activity associated with Uganda’s petroleum sector.
Key points
- Kampala and Dar es Salaam have posted higher yields on prime warehouse rents compared to Nairobi.
- Nairobi's prime warehouse rent yield stood at 9.5 percent in the first half of 2026.
- Uganda's prime industrial warehouse occupancy remained above 80 percent in the six months to June 2026.
