The Surging Wave of Commercial Real Estate Development in Dar es Salaam: Why Residential Takes a Back Seat

Dar es Salaam Apartment Exterior

Here’s a surprising stat: Dar es Salaam is set to grow by over 80% by 2035, making it one of Africa’s fastest-growing cities. With this kind of expansion, you’d think residential development in Dar es Salaam would be dominating headlines. But instead, it’s commercial development in Dar es Salaam that’s stealing the spotlight. 

What’s causing this shift? From infrastructure upgrades to economic policy, there’s a lot at play. And as we discovered during our own real estate explorations in Dar es Salaam, there’s a major challenge holding residential developments back—Tanzania’s property laws. Let’s explore why residential projects are lagging behind and how this impacts the city’s real estate market. 

Why is Commercial Development Thriving? 

Economic Growth Creates Demand for Commercial Spaces: 
Dar es Salaam is Tanzania’s economic heartbeat, and its rapid growth has businesses clamoring for space. Retail hubs, office buildings, and industrial developments are booming because they cater to regional trade, local enterprise, and foreign investment. 

Unlike housing projects, commercial properties offer developers faster returns through leasing and rental income. Investors targeting commercial real estate development know they can count on strong demand, especially in growing areas like the central business district and emerging industrial hubs. 

Infrastructure Projects Driving Commercial Real Estate: 
The government’s focus on large-scale infrastructure, such as the Dar es Salaam port expansion and upgraded road networks and railways, is drawing businesses to the city. These improvements make it easier to trade and commute, creating hotspots for commercial development in Dar es Salaam. 

For developers, the proximity of these projects signals high-potential zones for retail centers and office spaces, further solidifying the dominance of commercial ventures. 

The Residential Development Challenge

Condominium Laws (Or Lack Thereof) 
Here’s a major roadblock: mainland Tanzania doesn’t have a condominium board that enables developers to offer lease agreements or unit-specific “title deeds.” This means developers can’t pre-sell individual apartment units to investors off-plan—a standard practice in other countries that lowers costs and mitigates risk. 

We experienced this firsthand during our own explorations into residential development in Dar es Salaam. Without these systems in place, developers must shoulder the entire cost of construction upfront, making residential projects significantly more expensive and less appealing. 

Affordability and Financing Hurdles 
Another challenge is affordability. While demand for housing exists, many residents are priced out of the market for new developments. Developers often struggle to balance high construction costs with creating affordable units, further slowing residential development in Dar es Salaam. 

The Rise of Mixed-Use Developments 

Bridging the Gap 
Mixed-use projects, combining retail, office, and housing spaces, are emerging as a solution to the residential vs. commercial divide. These developments allow developers to diversify income streams while addressing housing needs. 

For investors, they offer the chance to buy apartments in Dar es Salaam that are integrated into thriving urban hubs. And for those looking to build apartment buildings in Dar es Salaam, mixed-use models may offer a more sustainable pathway forward. 

What Does This Mean for Investors? 

If you’re eyeing opportunities in Dar es Salaam, understanding the market dynamics is crucial. Commercial real estate development offers immediate and consistent returns, while residential projects require navigating legal and financial challenges. 

That said, the growing city population ensures long-term demand for housing. Strategic investments in innovative residential solutions—like mixed-use developments—can position you ahead of the curve. 

Final Thoughts 

The dominance of commercial development in Dar es Salaam isn’t just a trend—it’s a response to the city’s booming economy and infrastructure growth. While residential development in Dar es Salaam faces challenges like affordability and legal hurdles, innovative solutions like mixed-use properties are beginning to bridge the gap. 

For developers and investors alike, understanding these dynamics is key to navigating the city’s growing real estate market. Whether you’re looking to buy apartments in Dar es Salaam or capitalize on its thriving business districts, now is the time to seize the opportunity. Contact us at TPH to discover residential development opportunities in Dar es Salaam.