Explore property investment opportunities in Mombasa, Diani, Malindi, and Lamu. Learn why Kenya’s coastline offers some of the best real estate investment opportunities.
Kenya’s stunning coastline, pristine beaches, rich culture and booming tourism industry are making it an increasingly attractive destination for residential property investment. From the bustling city of Mombasa to the serene shores of Lamu each coastal town offers unique opportunities for investors seeking high returns and lifestyle benefits. Let’s explore the top coastal towns in Kenya that should be on every investor’s radar.
Mombasa, Kenya’s second-largest city, is a vibrant economic hub with a rich history and a thriving port. Property investors are drawn to its strategic location and rapidly growing infrastructure. The city offers diverse investment opportunities, from luxury beachfront villas to commercial properties in the city center.
Areas like Nyali are an excellent option for investment in Mombasa. With the increase in population in Kenya, especially expatriates, demand for housing in Mombasa is higher than ever. Most prefer Nyali, an exclusive area that is full of social amenities therefore making it an investment hotspot.
Strong tourism industry driving rental demand. Expanding infrastructure, including the Standard Gauge Railway (SGR). Diverse property options, from apartments to commercial spaces.
Diani Beach is renowned for its white sandy beaches and turquoise waters, making it a prime spot for vacation homes and Airbnb rentals. The area attracts tourists and expatriates, ensuring a steady demand for short-term rentals. In 2025, Diani is the most sought-after coastal town for real estate investment.
Residential properties in Diani have high rental yields from tourism, especially short-term rentals & Airbnb. The growing community of expatriates and retirees is causing a rise in exclusive luxury development. The social life in Diani is vibrant and full of various activities such as dolphin watching and kite surfing.
Malindi is another major coastal town located along the North Coast of Kenya. It’s a key town in the coastal real estate market. Malindi’s rich Swahili culture and historic landmarks make it a unique investment destination. Some of the historical landmarks include; the Vasco Da Gama Pillar, Portuguese Chapelle, Malindi Museum and Marine National Park.
With improved infrastructure, Malindi offers a unique blend of modern infrastructure and historical presence. The town is popular with European tourists, creating opportunities for resorts, vacation homes, and cultural tourism ventures. There has been an expansion of the Malindi airport which means more traffic of tourists can be accommodated.
Malindi is an established tourist destination with opportunities for a wide variety of eco-tourism and cultural tourism. This has led to an increase in demand for holiday rentals. Malindi offers affordable residential property prices as opposed to Diani’s premium prices.
Lamu Island, a UNESCO World Heritage site, offers a peaceful retreat with its car-free streets and stunning architecture. The opening of the Lamu port in 2021, opened up the Town for investors to engage in various ventures, Real Estate being one of them. It’s an ideal location for investors interested in boutique hotels, heritage properties, and eco-friendly developments.
Lamu has unique heritage and culture, an example being the architecture of the town. There is an emerging eco-tourism market and residential properties have high potential for value appreciation.
Kenya’s coastal towns present a blend of strong rental yields, growing tourism, and lifestyle benefits. Infrastructure development, government incentives, and a welcoming investment climate make these towns ripe for real estate opportunities. Coastal towns have experienced a rise in property values by 15% in the last 5 years. Major infrastructure developments such as the Dongo-Kundu bypass, Mombasa-Kilifi highway, and expansion of airports have made the towns more accessible, reducing travel time. Below is a summary of the 4 coastal towns.
Mombasa : Already established and has less risk due to the high demand for properties. Offers high ROI.
Diani : Requires high capital investment due to premium properties but offers high returns. It is also a great retirement location.
Malindi : Offers a blend of modern features and historical presence. Offers competitive rates for properties.
Lamu : It's a high-risk investment since Lamu is still growing. Suitable for long term investment.
Roots Africa is here to guide you through the property investment journey along Kenya’s breathtaking coastline. Whether you’re looking for a holiday home, rental income, or long-term investment, our experts will help you find the perfect property.
Ready to Make the Smart Move? Visit our website today to learn how you can start or grow your property portfolio in Kenya!
