What Is a Feasibility Study?

A feasibility study is a detailed assessment undertaken before a proposed project is developed to determine whether the project is practical, commercially viable and financially achievable. In real estate, it provides investors and developers with a structured evaluation of the factors that can influence the success or failure of a proposed development. For reliable market information, developers can also refer to data published by the Kenya National Bureau of Statistics (KNBS).

Rather than proceeding with a project based on assumptions, a feasibility study brings together market research, location analysis, development costs, revenue projections, financial analysis and risk assessment to provide a clearer picture of the investment opportunity.

For a property investor, this could mean assessing whether a proposed apartment development is likely to attract enough buyers or tenants at the anticipated prices. For a commercial developer, it could involve determining whether there is sufficient demand for office, retail or industrial space in a particular location. For a landowner, a feasibility assessment can help determine whether the proposed use of the property represents a viable development opportunity.

A comprehensive feasibility study therefore helps answer an important question:

Is the proposed project worth pursuing, and what needs to be considered before investing?

Market Demand

Understanding market demand is one of the most important components of a feasibility study. A development may look attractive on paper, but if there is insufficient demand for the finished property, the project could struggle to generate the expected returns.

The assessment examines the characteristics of the intended market and considers factors such as the target customers, population trends, income levels, consumer preferences, existing demand and emerging market opportunities.

For residential developments, this may involve assessing demand for apartments, townhouses, maisonettes, affordable housing or serviced apartments. For commercial projects, the analysis may consider demand for office space, retail premises, warehouses or other commercial facilities.

Understanding market demand helps ensure that the proposed development is aligned with what potential buyers, tenants or users actually need.

Competition

A feasibility study also examines existing and planned developments that may compete with the proposed project.

Competitive analysis can consider:

• Similar properties in the area
• Property prices
• Rental rates
• Occupancy levels
• Unit sizes and configurations
• Amenities and facilities
• Location advantages
• Target customer segments
• Strengths and weaknesses of competing developments

This analysis helps investors understand how their proposed project could be positioned within the market.

For example, if several similar apartment developments already exist in an area, simply constructing another development may not provide the expected returns. The project may need a different unit mix, pricing strategy, location advantage or unique value proposition to compete effectively.

Development Costs

Understanding the total investment required is another critical element of a feasibility study.

Development costs can include much more than the cost of constructing the building. Depending on the project, the assessment may consider:

• Land acquisition costs
• Site preparation
• Construction costs
• Infrastructure and utilities
• Professional consultancy fees
• Architectural and engineering services
• Statutory approvals and related costs
• Financing costs
• Marketing and sales expenses
• Project management costs
• Operating requirements
• Contingency allowances

A realistic assessment of development costs helps investors establish how much capital may be required to complete the project.

It can also highlight areas where costs could potentially affect profitability and whether the proposed development remains financially attractive after all major expenses are considered.

Revenue Potential

A project must have a realistic revenue model to support its investment case.

Depending on the type of development, revenue may be generated through property sales, rental income, commercial leases, hospitality operations or other property-related income streams.

For a residential development intended for sale, a feasibility study may assess potential selling prices, the expected rate at which units could be sold and the likely demand for different unit types.

For a rental development, the assessment may consider achievable rental rates, occupancy levels, operating expenses and potential rental income.

For commercial property, the analysis may examine market rental rates, tenant demand, vacancy levels and the potential income that could be generated from the available space.

Revenue projections should be based on realistic market evidence rather than overly optimistic assumptions. This is important because overstated revenue can make an otherwise weak project appear profitable.

Investment Requirements

A feasibility study helps establish the level of investment required to move a project from concept to completion.

This may include the initial cost of acquiring land, funds required for construction, professional fees, statutory costs, financing requirements, marketing expenses and working capital.

Understanding the investment requirement allows investors to assess whether they have sufficient capital to proceed or whether additional financing or investment partners may be required.

For larger developments, the analysis can also help investors understand how capital may need to be deployed throughout the different stages of the project.

This provides a clearer picture of the financial commitment involved before the development begins.

Making an Informed Investment Decision

Ultimately, a feasibility study brings these different areas of analysis together to provide an overall assessment of a proposed project.

The findings can help an investor or developer decide whether to:

• Proceed with the proposed development
• Modify the development concept
• Change the target market
• Review the proposed pricing
• Consider an alternative use for the property
• Adjust the investment strategy
• Conduct further research
• Delay the project until market conditions improve
• Or decide not to proceed

This makes a feasibility study an important decision-making tool rather than simply a report.

For investors considering property development in Kenya, obtaining an independent assessment before committing substantial capital can provide valuable insight into the opportunity, potential returns and risks involved.

At GIMCO Limited, our feasibility studies are designed to give investors, developers, landowners and institutions the information they need to evaluate real estate opportunities and make informed investment decisions.

Investment and Project Risks

Every real estate investment carries some level of risk, and identifying these risks before committing significant capital is an important part of feasibility analysis.

Potential risks may include:

• Lower-than-expected market demand
• Rising construction costs
• Changes in property prices
• Financing challenges
• Delays in development
• Increased competition
• Changes in economic conditions
• Regulatory or approval requirements
• Construction and operational risks
• Changes in consumer preferences

A feasibility study helps identify these potential challenges and allows investors to consider appropriate strategies for managing them.

The purpose is not to eliminate every risk something that is rarely possible in real estate but to ensure that investors understand the risks they are taking and can make informed decisions about whether the potential opportunity justifies them.

Our Feasibility Study Services

At GIMCO Limited, we provide comprehensive feasibility studies in Kenya for a wide range of real estate developments.

Each project is assessed based on its location, proposed use, target market, investment requirements, development costs, potential revenue and associated risks.

Our approach is tailored to the specific characteristics of each project. Whether you are planning a residential development, commercial property, industrial facility, mixed-use project or specialized development, our feasibility assessment helps you understand the opportunity before committing significant capital.

Residential Developments

Residential developments require a clear understanding of housing demand, buyer and tenant preferences, affordability and competition within the target location.

Our feasibility studies cover projects such as apartments, townhouses, maisonettes, gated communities, affordable housing developments, student accommodation and serviced apartments.

We assess demand for different unit types, achievable selling prices or rental rates, preferred amenities, occupancy expectations and competing residential developments.

We also consider the site’s accessibility and proximity to employment centres, schools, shopping facilities, transport links and other amenities.

This analysis helps developers determine whether the proposed residential concept is aligned with market requirements. It can also highlight opportunities to adjust the unit mix, pricing or development strategy.

Commercial Developments

Commercial property requires careful assessment of business demand, tenant requirements, rental levels and competition within the target market.

GIMCO conducts feasibility assessments for office buildings, retail centres, shopping facilities, business parks, commercial complexes and other income-generating properties.

The assessment may examine demand for commercial space, existing and planned competing developments, prevailing rental rates, occupancy levels and potential tenant profiles.

For office developments, we can assess demand for different office sizes and specifications, likely tenant groups and achievable rental levels.

For retail developments, the analysis may consider customer catchment areas, accessibility, surrounding population, purchasing patterns and competing retail facilities.

This helps investors understand whether the proposed commercial project can respond to market demand and generate sustainable income.

Industrial Projects

Industrial developments require different considerations from residential and commercial property.

Location, accessibility, infrastructure, transport connectivity, land availability and proximity to key markets can significantly influence the viability of an industrial project.

Our feasibility studies can assess warehouses, logistics facilities, industrial buildings, distribution centres, storage facilities and other industrial developments.

We examine factors such as vehicle accessibility, proximity to major roads and transport networks, availability of utilities and surrounding land uses.

The assessment can also consider competing industrial properties, prevailing rental rates, potential tenant requirements and development costs.

For investors considering industrial property as an income-generating asset, this analysis provides insight into potential demand, rental income and project risks.

Mixed-Use Developments

Mixed-use developments combine two or more property uses within the same project. These may include residential apartments, offices, retail space, hospitality facilities and other commercial uses.

Because these projects involve multiple components, they require a comprehensive assessment to determine whether the different uses can work together commercially.

Our analysis may examine demand for each component, the appropriate allocation of space, potential rental or sales income, development costs and competition.

For example, a mixed-use development may include apartments above retail and office space.

The feasibility study can assess whether there is sufficient demand for each component and whether the combined development presents a stronger opportunity than a single-use project.

Where appropriate, we can also evaluate different development scenarios, allowing investors to compare alternative concepts before making a final decision.

Specialized Projects

Some real estate developments have unique requirements and cannot be assessed using a standard residential or commercial property model.

Our specialized feasibility studies can cover projects such as hotels, serviced apartments, educational facilities, healthcare developments, institutional projects, recreational facilities and other specialized developments.

The assessment considers the specific factors that influence the proposed project.

For a hospitality development, for example, this may include visitor demand, competing hotels, room rates, occupancy levels, location and operating considerations.

For educational or healthcare developments, the analysis may consider population characteristics, demand for services, accessibility, competition and the suitability of the proposed site.

The objective is to ensure that the feasibility assessment reflects the unique requirements of the proposed development rather than relying on generic assumptions.

A Tailored Approach to Every Project

Every property development is different. A project that performs well in one location may not produce the same results in another.

For this reason, GIMCO’s feasibility studies in Kenya are tailored to the specific project, location and investment objectives.

We consider market conditions, the development concept, financial requirements, potential revenue and risks relevant to each assignment.

Our objective is to provide investors and developers with practical information to help them determine whether to proceed, modify the proposed project, consider an alternative development concept or reassess the investment opportunity.

Planning a residential, commercial, industrial, mixed-use or specialized development in Kenya? Contact GIMCO Limited to discuss your project and request a professional feasibility study.

Location Analysis

Location can have a significant impact on the success of a real estate project. A strong development concept may still struggle if the site does not offer the accessibility, infrastructure or surrounding amenities required by the target market.

Land due diligence is another important part of a feasibility study. Before proceeding with a proposed development, investors should investigate land ownership, title information, restrictions, planning considerations and other factors that could affect the project. The Ardhisasa platform provides access to government land information and services, including land registration, physical planning, survey and mapping, valuation and other land-related processes.

As part of our feasibility studies in Kenya, GIMCO evaluates the location of a proposed development and its surrounding environment. We consider factors such as:

• Accessibility and Roads: Proximity to major roads, highways and alternative routes.
• Public Transport: Availability of matatus, buses, rail services and other transport options.
• Commercial Centres: Access to business districts, markets and commercial areas.
• Schools and Hospitals: Proximity to educational institutions and healthcare facilities.
• Shopping Centres: Availability of malls, supermarkets and other retail facilities.
• Employment Centres: Distance from major business and employment hubs.
• Infrastructure: Quality and availability of roads, drainage and other supporting infrastructure.
• Utilities: Access to electricity, water, sewerage, telecommunications and other essential services.
• Security: General security conditions and factors that may influence the attractiveness of the location.
• Planned Developments: Proposed infrastructure, residential, commercial and public developments that could affect future demand and property values.

This analysis helps determine whether the proposed location is suitable for the intended development and target market. It can also identify location advantages, potential challenges and future opportunities that may influence the project’s commercial viability.

A well-chosen location can strengthen demand, improve marketability and support long-term property performance. GIMCO’s location analysis provides investors with practical insights before they commit significant capital to a development project.

Development Concept Assessment

A successful real estate project needs to match both the site and the market. GIMCO assesses whether the proposed development concept is appropriate for the location, target customers and available resources.

Depending on the property, we may assess concepts such as:

• Apartments – unit types, sizes, amenities and target market.
• Offices – office specifications, tenant demand and potential rental levels.
• Retail – customer catchment, accessibility and demand for retail space.
• Warehouses – location suitability, access and demand from businesses.
• Hotels – visitor demand, competition, room rates and occupancy potential.
• Mixed-Use Projects – suitability of combining residential, commercial, retail or hospitality uses.

Where necessary, we also compare alternative development scenarios to determine which option offers the strongest potential based on market demand, development costs, revenue and investment objectives.

This helps investors avoid committing to a development concept simply because it appears attractive and instead choose an option supported by market and financial evidence.

Development Cost Assessment

Understanding the full cost of a development is essential when determining its viability.

GIMCO assesses the major costs associated with a proposed project, including:

• Land: Acquisition and associated land costs.
• Construction: Building and site development costs.
• Infrastructure: Roads, drainage, utilities and other supporting works.
• Professional Consultants: Architectural, engineering, valuation and other consultancy fees.
• Approvals: Relevant statutory and regulatory costs.
• Financing: Interest and other financing-related expenses.
• Marketing: Sales, advertising and promotional costs.
• Project Management: Costs associated with coordinating and managing the development.
• Contingencies: Allowances for unforeseen project expenses.

This provides investors with a clearer estimate of the capital required and helps identify costs that could affect the project’s profitability.

Who Needs Feasibility Studies in Kenya?

Feasibility studies can benefit anyone considering a significant property development or investment. GIMCO provides independent analysis to help different types of clients understand opportunities, costs, risks and potential returns before making major financial commitments.

Property Developers

Determine whether a proposed development is commercially and financially viable before committing to construction.

Real Estate Investors

Evaluate potential returns, investment requirements and risks before committing capital to a property project.

Landowners

Explore the most suitable and potentially viable development options for their land based on market demand and location.

Businesses

Assess proposed offices, warehouses, commercial facilities and other property developments before investing in them.

Institutional Investors

Evaluate large-scale property development opportunities using market research, financial analysis and risk assessment.

Diaspora Investors

Access independent property investment information and feasibility analysis when making development decisions remotely from outside Kenya.

Feasibility Studies and Property Valuation

A feasibility study and a property valuation serve different purposes, although both can play an important role in property investment decisions.

Property valuation determines the market value of a property for a specific purpose, while a feasibility study evaluates whether a proposed development or investment is commercially and financially viable.

For example, an investor acquiring land for development may need to understand both the current value of the land and whether the proposed development is likely to be viable.

These two assessments can therefore provide complementary information when making property investment decisions.

Learn more about GIMCO’s property valuation services →

Our Feasibility Study Process

GIMCO follows a structured process to evaluate the viability of proposed property developments. The exact scope may vary depending on the project, location and client’s requirements.

01 — Understand the Project

We begin by understanding your objectives, proposed development, site and target market.

02 — Gather Information

We collect relevant property, market, development and financial information required for the assessment.

03 — Conduct Market Research

We assess market demand, competition, pricing, customer preferences and relevant market trends.

04 — Financial Analysis

We evaluate development costs, potential revenue, cash flow, profitability and potential investment returns.

05 — Assess Risks

We identify factors that could affect the project’s commercial and financial performance.

06 — Prepare the Report

We present our findings, analysis and recommendations in a structured feasibility report to support your investment decision.

Why Choose Gimco for Feasibility Studies?

• Decades of Experience – Trusted real estate consultancy since 1985.
• Data-Driven Insights – Research-based recommendations that guide sound investment decisions.
• Regional Reach – Operations across East and Central Africa with local market expertise.
• Customized Reports – Tailored studies to match your project goals and budget.
• Holistic Approach – Incorporating property management, facility management, and co-working space dynamics into assessments.