Before a single architectural plan is drawn. Before a contractor is briefed. Before a planning application is submitted. There is one question that separates developers who build well from those who build and then wonder why the numbers did not work out.
That question is this: what is the highest and best use of this land?
It sounds straightforward. In practice, it is one of the most rigorous and consequential analyses in real estate, and in Kenya, it remains one of the most underused.
What Highest and Best Use Actually Means
Highest and best use, commonly referred to as HBU, is the analysis that identifies the legally permissible, physically possible, financially feasible, and maximally productive use of a given piece of land or property.
Both the Royal Institution of Chartered Surveyors (RICS) and the Appraisal Institute recognise that a property’s use is the precursor to its value. In other words, what you build determines what it is worth, not the other way around. This principle sits at the core of sound property development practice internationally, and it is just as applicable in Nairobi as it is in London or Singapore.
In plain terms: not every site should be developed the same way. A plot in Kilimani may look ideal for a residential apartment block. But if the traffic patterns, zoning regulations, nearby amenities, and market demand actually point toward commercial office use, then a residential development on that site will underperform. Not because the project was badly designed or poorly built, but because the wrong product was placed in the right location.
That is the problem HBU analysis exists to prevent.
Why Developers in Kenya Often Skip This Step
The most common reason developers bypass a formal HBU analysis is that they have already made a decision. They own the land, they have a product in mind, and they want to move quickly. Bringing in an advisory firm at that stage can feel like introducing friction.
But that instinct inverts the risk. Moving fast on the wrong product type is significantly more expensive than taking four to eight weeks at the start of a project to pressure-test your thesis. The Nairobi market has documented this pattern clearly. In 2025 alone, several notable developments entered insolvency or administration proceedings, with market oversupply and misaligned product development cited among the contributing factors. Luxury apartment segments in areas like Kilimani experienced vacancy rates of between 30 and 40 percent in some buildings, a direct result of developers building what they knew rather than what demand supported.
A HBU analysis is not a bureaucratic gate. It is the intellectual foundation of a sound investment decision.
What a Feasibility Study Adds
Closely related to HBU analysis is the feasibility study. HBU identifies the optimal use of a site. A feasibility study tests a specific development concept against the financial realities of bringing it to market.
A properly structured feasibility study will examine land acquisition costs against projected revenues, construction costs per square metre, absorption rates in the target market, comparable transactions in the area, likely rental or sale yields at completion, and the cost of capital across the development period.
The output is not a guarantee, and no study can promise you a market. But it gives developers and investors a clear, evidence-based picture of where a project sits on the risk-return spectrum, and it identifies the critical variables that will determine success before money is committed.
At Newpoint Properties, we have completed feasibility studies for retail, office, and mixed-use developments across Nairobi. Each one is grounded in real transaction data, genuine market intelligence, and a deep understanding of demand within the specific area a developer is targeting.
Why We Moved Away from Standard Valuations
A decade ago, valuation work was the bread and butter of many advisory firms in Kenya. Bank-panel valuations, insurance assessments, mortgage-driven appraisals. The demand was consistent and the work was straightforward.
But standard valuations carry significant professional liability with limited advisory value. In Kenya, valuers are regulated under the Valuers Act (Chapter 532) and must be registered with the Valuers Registration Board. A valuation that is later found to be incorrect, even marginally, can expose the valuer to regulatory and legal consequences that far outweigh the fee earned. Kenya has enough qualified valuers serving that market well. What it does not have enough of is reliable market data to support the Valuers’ opinion on Value. There also lacks firms doing genuinely strategic advisory work: the kind of independent, rigorous thinking that helps developers and investors make better decisions before they are locked into them.
That is why Newpoint Consulting focuses on advisory, feasibility, and HBU analysis. The mandates are fewer, the fees reflect the depth of the work, and the quality of client engagement is a completely different conversation.
One thing we are particularly proud of is that our advisory work never stops at advice. When a client trusts us to guide them on a project, we see it through to the end. Whether that means stepping in to handle the sales or taking on the rentals and ongoing property management. For us, this full cycle is not just how we work but how we stand behind everything we recommend, and that consistency has a way of speaking for itself. Most of the developers we work with today came to us through someone we had worked with before. A project well-seen-through becomes a conversation at someone’s next meeting, and that conversation becomes a new relationship. We have never taken that lightly, referrals are not just good for business, they tell us we are doing something right.”
A Notable Example
Several years ago, we published an article on how foreign nationals can own property in Kenya. A company based in southern Africa came across it while researching their East African expansion. They were not looking for a property firm in the traditional sense. They were looking for someone who clearly understood the market and could be trusted.
They reached out. We represented them through their entire Kenya entry process, from initial advisory and market assessment through to final lease execution. That mandate came from content that genuinely answered a question people were already asking. It is a reminder that the best business development is education, not promotion.
Who Should Be Having This Conversation
If you are evaluating development options on land you have acquired, considering a change of use for an existing property, assessing a proposed development as a lender or co-investor, or a landowner who has been approached with a development proposal and wants independent advice before committing, this is the right moment to have a proper advisory conversation.
The cost of a well-executed feasibility study or HBU analysis is a fraction of the cost of making the wrong call on a multi-million-shilling development.
The Standard We Are Building Toward
Developers trust advisory firms not because they fill buildings, but because they help clients understand what to build, and in some cases, whether to build at all. That is the standard Newpoint Consulting is building toward in Kenya. A local firm, with genuine market knowledge and long-term client relationships, doing the kind of work that has historically required an international partner.
We are not there to take a fee and move on. We are there to be the firm our clients call first, every time.
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