Kenya’s transport and storage sector expanded by 5.2 percent in the second half of 2025, up from 4.6 percent in 2024, attributable to a wave of rising trade volumes and competition by investors to establish resilient supply chains. 

Knight Frank latest industry report shows that the largest economy in East Africa is experiencing increase in trade volumes, and therefore, higher demand for last-mile delivery services.

“Kenya’s industrial and logistics market recorded sustained growth through H2 2025, underpinned by strong capital inflows into purpose-built industrial and logistics parks, increased manufacturing investment, and continued expansion of transport and storage infrastructure,” the report reads.

Knight Frank adds that prime warehouse occupancy levels remain above 80 percent, reflecting strong demand for quality logistics space, particularly along key corridors such as Mombasa Road, Athi River and the Eastern Bypass.

The improved performance underscores the continued strengthening of logistics activity, even as Kenya’s broader industrial real estate market gains traction.

However, despite robust uptake, prime warehouse rents have largely stabilised at about Sh750–Sh800 per square metre per month, indicating a market balancing strong demand with rising construction and financing costs.

Key developments during the period under review include the operationalisation of the Kes5 billion Kenanie Leather Industrial Park in Machakos, a flagship project aimed at boosting value-added manufacturing and positioning Kenya as a competitive exporter of leather products.

Investments in the automotive sector have also injected fresh momentum into the industrial space. These include the restart of vehicle assembly operations by Volkswagen in Thika and the development of a Kes3.1 billion parts distribution centre by Isuzu Motors in Lukenya.

Additionally, Special Economic Zones (SEZs) continue to attract significant capital into industrial infrastructure.

The report highlights Tatu City as the country’s most active operational SEZ, having secured over Kes65 billion in investment commitments. 

Among the notable projects is a 63,000 square metre manufacturing and mixed-use facility by Chinese investor Hounen, underscoring growing foreign interest in Kenya’s industrial ecosystem.

The pipeline for industrial land is also expanding, with developments such as the 2,000-acre Vipingo Special Economic Zone and the ongoing rollout of the Nairobi Free Trade Zone, both expected to enhance Kenya’s position as a regional manufacturing and logistics hub.

Across the continent, Knight Frank notes that Africa’s industrial and logistics sector continues to demonstrate resilience, supported by structural shifts in commerce and supply chains.

“E-commerce, infrastructure investment and the increasing formalisation of supply chains are expected to remain key drivers of demand for industrial and logistics space across Africa,” the report notes.

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