Dar rental surge: Why the city now outprices regional peers

According to the 7th edition of the Africa Real Estate Report 2026/27, launched last month by global property consultants Knight Frank, a ‘selective recovery’ is driving value growth across the continent.

The report, titled The Ultimate Guide to Africa’s Real Estate Markets, highlights a performance-led cycle in which the Democratic Republic of Congo (DRC) has emerged as the regional leader in rental costs.

Tanzania and Kenya rank among Africa’s top 15 markets, while Zambia and South Africa represent high-performing locations in the Southern African region.

Dar es Salaam’s dominance is particularly evident in premium residential areas.

Prime properties in Oyster Bay and Masaki command monthly rents of $3,500, comfortably exceeding Nairobi’s $3,100 average.

By comparison, Kinshasa’s prime four-bedroom villas attract a staggering $8,000 monthly due to a persistent shortage of internationally compliant Grade A stock.

"Kinshasa remains a landlord’s market," the report notes, citing demand that consistently outstrips available supply.

This shortage sets a high regional benchmark, while locally the momentum remains equally strong.

"Tanzania’s real estate market in 2026 is on a steady growth trajectory," the report states.

"Investment activity remains concentrated in Dar es Salaam, Dodoma, and Zanzibar, where opportunities span commercial, residential, and industrial assets," according to the document.

Major infrastructure projects, including the Standard Gauge Railway (SGR) and improvements to the Port of Dar es Salaam, are key catalysts.

"Recent improvements in port efficiency and cargo-handling capacity are reinforcing demand for logistics space," the report says.

This is creating ripple effects across residential and office sectors as multinational firms benefit from improved trade corridors.

Rental charges are further influenced by strong demand for specific locations, with the report observing that: "Premium coastal properties, particularly on the Msasani Peninsula, achieve rents of over $3,500 per month, reflecting their superior location and amenities.”

There is a clear shift towards gated communities and luxury apartments as tenants prioritise security and lifestyle choices. The industrial and logistics sector remains a ‘standout performer’, with prime warehouse yields reaching 10 percent, matching the DRC and Zambia in investment appeal.

"The industrial and logistics sector remains one of the strongest-performing asset classes," notes the report’s expert insight.

In the office sector, a ‘flight to quality’ continues to sustain high prices.

"Occupiers are placing greater emphasis on building quality, operational efficiency, and reliability of essential services, including backup power," the report explains.

While the market is slightly tenant-favourable, prime Grade A rents remain stable at $13 to $15 per square metre (psm), with Masaki reaching up to $20 psm.

Retail maturity is also evident, with malls such as Mlimani City and Morocco Square commanding rents of up to $40 psm.

According to the report, success now favours precision over scale: "Success in the upcoming period will favour developers and investors who deliver quality, flexibility, and specialisation."

Contacted yesterday, Mkonsult Ltd CEO, Mr Abbas Meghji, said Dar es Salaam’s growing population and expanding economic activity were driving demand for residential and commercial properties, but infrastructure needed to keep pace with rapid development.

He said the city’s roads, electricity, water supply, schools, hospitals and leisure facilities continued to attract people seeking to live and work in Dar es Salaam, creating demand for quality accommodation.

“We do not have enough rooms, and people have started becoming interested in investing in real estate,” said Mr Meghji, noting that developers were increasingly seeking to match standards and amenities available in international markets such as the United Kingdom and Dubai.

However, he said rapid expansion was exposing infrastructure and urban planning challenges, including traffic congestion, unreliable water supply, inadequate sewage systems and noise from entertainment facilities. He called on municipal and district authorities to improve urban infrastructure and the environment as the city expands, including upgrading roads to improve connectivity between the city centre and emerging residential areas.

“Water supply is another challenge because it is not reliable. Infrastructure has to grow alongside the city's growth. Sewage is also a problem, and in areas such as Masaki, drilling a water well is very expensive,” he said.

Maskani Real Estate Tanzania owner, Mr Paul Msabaha, said the sector needed a more efficient system to connect property seekers with owners.

As infrastructure and policy reforms continue, Dar es Salaam is set to remain East Africa’s most expensive residential hub for the foreseeable future in the region.