High net worth individuals seeking “risky” property investments with potential for huge returns should be focusing on key African markets such as Nairobi.

High net worth individuals seeking “risky” property investments with potential for huge returns should be focusing on key African markets such as Kenya’s capital Nairobi, according to an official of London-based real estate firm Knight Frank.

Andrew Hay, head of global residential, told Bloomberg TV in a recent interview that he would encourage HNWs seeking high-risk and high-return property investments, to buy in Nairobi.

“I think if you wanted to be risky, I would take you to Nairobi in Kenya,” Hay explained, adding that he would take investors looking for “quick growth” to Dubai in the UAE, while conservative ones seeking “prolonged, well-performing investment” would be taken to London or New York.

Similarly, Hay ranks Jakarta in Indonesia as another high risk property market, with Jakarta and Nairobi having outranked global cities in terms of house price growth over the past few years. In its latest global rental index, Knight Frank said Nairobi topped the annual rankings for the second consecutive quarter with a 25.8 per cent increase in high-end house rents in the 12 months to end of September.

The increase in rents, it said, was due to expatriate demand for secure high-end rental houses in Nairobi’s suburbs amid increased terrorism threats.

“Recent security concerns (in Nairobi) mean demand for secure accommodation – be it apartments or gated compounds – is strong and supply is limited,” the firm’s international residential researcher Kate Everett-Allen stated in the Prime Global Rental Index for the third quarter 2013.

Expatriates tend to focus on rental houses in upmarket suburbs such as Westlands, Kitisuru, Gigiri, Muthaiga, Runda, Roselyn and Karen, where the high rents make Nairobi a hotspot for HNWs seeking lucrative returns. However, the firm also warned that investments here involve a huge risk due to the rising security threats.

To this end, the index also revealed that prime rents rising in Nairobi and Dubai have been an exception in post-crisis markets, as other key cities worldwide recorded weak rental growth up until 2012.