How to Know the Highest and Best Use of Your Commercial Land
The determination of the highest and best use of commercial land in Kenya has often been approached informally. Many rely on assumptions based on neighborhood trends—if there are several flats, one builds flats; if there are restaurants, one builds a restaurant.
Popularity, however, does not guarantee profitability or long-term viability. Highest and best use means choosing what is most profitable, convenient and sustainable over time, while balancing potential risks and rewards.
Legal frameworks also influence land potential. The Physical and Land Use Planning Act (PLUPA) of 2019 provides zoning guidelines, but growth potential ultimately concentrates where value accumulation is feasible.
Evaluating a land`s highest and best use requires a rigorous application of four distinct tests. These tests must be applied sequentially, as failure in the earlier stages can invalidate later analysis.
1. Historical Context
- How was the land originally acquired?
- What was its initial purpose?
- Are there restrictions or easements that limit development options?
2. State of Infrastructure
- How accessible is the land from major roads?
- How reliable are drainage systems, including sewer lines?
- What is the extent and reliability of power supply?
- Are there streetlights and basic public utilities in place?
3. Proximity to Basic and Secondary Needs
- How close is the area to employment hubs?
- Is it near schools, hospitals, shopping centers,
- and religious institutions?
- Does the location meet the lifestyle and convenience expectations of potential tenants or buyers?
4. State of the Neighborhood
- What is the current trend of development in the area?
- Are there nearby informal settlements or slums that could affect desirability?
- Are resident associations or community groups active to help safeguard political interests?
- What is the demographic profile—age, income and cultural makeup?
- How safe is the neighborhood? Are there police posts or security issues such as vandalism?
In conclusion, this forms the basic fundamentals to validate your project idea before proceeding for that comprehensive study. Know when to walk away rather than initiating the project on baseless assumptions.
Highest and best use means choosing what is most profitable, convenient and sustainable over time, while balancing potential risks and rewards.
For more information, reach out to us via info@rickfes.co.ke
At Rickfes Construction Ltd, we conduct detailed market studies and Comparative Market Analyses to guide project design, unit mix and pricing strategies. Our role is to ensure that every development decision is backed by data, aligned with demand and positioned for long-term performance.
