Monthly office rent in Nairobi’s prime areas dropped by Sh19.40 per square foot in the year to March on reduced demand as companies continued to allow employees to work from home.
The monthly asking rent in March 2021 dropped to $1.12 (Sh120.71) per square foot from $1.3 (Sh140.11) that owners were asking in the quarter to March last year, just before Covid-19 disruption set in.
This translate into a saving of Sh1,940 for a business occupying office space of 100 square feet.
The findings are contained in a new report titled Africa Office Market Dashboard by realtor Knight Frank, which tracks prime office rents in 28 cities whose office space occupancy levels averaged 70 percent in the review period.
The realtor cited fundamentals such as working from home, continued oversupply of commercial space and unfavourable economic conditions as the main reasons for the softening of rent price.
Knight Frank Kenya head of agency Anthony Havelock said the fresh lockdowns that were introduced towards the end of the first quarter impacted negatively on market activity.
“There remains an oversupply of commercial space in most districts across the city which together with the slowly recovering economy and working from home dynamic has given occupiers the upper hand in lease term negotiations and forced landlords/developers to be more flexible,” said Mr Havelock.
Nairobi’s monthly prime rent per square metre averages Sh1,293 ($12) putting it at position six alongside Lilongwe on cities with cheaper office rent.
Harare ranks as the cheapest (Sh754) followed by Blantyre (Sh1,005), Tunis (Sh1,077) and Gaborone (Sh1,288). Cities with expensive rent are Lagos (Sh6,734) and Luanda (Sh5,926).