NAIROBI, Kenya- Kenya’s prime office space market is thriving, with occupancy rates jumping by 25pc over the 12 months leading to June 2024.
Nairobi continues to solidify its role as one of Africa’s key business hubs, alongside cities like Lagos, Cairo, and Dar es Salaam, as businesses recover in the post-COVID era.
According to a report from global property consultancy Knight Frank, the average prime office space occupancy in Kenya rose to 75pc, up from 60pc the previous year.
Despite an oversupply of office space, particularly in Nairobi, prime office rents have largely remained stable, signaling renewed demand from multinationals and local companies alike.
Nairobi, often regarded as the gateway to East Africa, has long been a magnet for multinational corporations.
However, the city has also faced an oversupply of office space in recent years. Despite this, Knight Frank Kenya’s CEO, Mark Dunford, points to the 25pc rise in prime office occupancy as evidence of both a return to traditional workspaces post-pandemic and a shift in focus towards high-quality, “best-in-class” office environments.
Rents for prime office space in Nairobi have remained steady at an average of $13 (Sh1,677) per square meter, with new projects such as the $50 million Eneo development in Tatu City contributing an additional 25,800 square meters of high-quality office space.
The rise of co-working spaces is also playing a role in Nairobi’s growing office occupancy.
As businesses embrace more flexible working arrangements, the demand for shared workspaces is increasing.
Dunford notes that this aligns with global trends, where companies are seeking adaptable spaces that offer more than just a desk and chair.
In cities like Lagos and Cairo, prime office rents have similarly held steady, with Lagos averaging $56 (Sh7,224) per square meter and Cairo at $35 (Sh4,515) per square meter.
However, true Grade A office spaces remain scarce across the continent, creating a tenant-favorable market in many African cities, including Nairobi.
Another emerging trend is the increasing focus on sustainability in office spaces. Occupiers in major African markets, such as South Africa, Egypt, Morocco, and Kenya, are now prioritizing buildings that meet Environmental, Social, and Governance (ESG) criteria.
This shift is in line with global sustainability goals, as more companies seek to reduce their carbon footprint by choosing environmentally friendly workspaces.
The scarcity of Grade A office spaces, combined with the push for sustainability, presents both a challenge and an opportunity for developers and tenants alike.
In Uganda, for example, Grade A offices have an average occupancy rate of 90pc, while in Tanzania, prime offices enjoy an 80pc occupancy rate, both exceeding the continental average of 75pc.
The surge in office space occupancy in Kenya, particularly in Nairobi, signals a rebound in business activity and growing confidence in the post-pandemic era.
