Kenya's prime office occupancy rate grew to 75 percent in the first half of the year compared to 71.5 percent a year earlier, helped by reduced supply of new units in a market that has suffered glut for years.
The latest Knight Frank Africa report shows that a gradual return to the office following the disruption caused by the Covid-19 pandemic has helped boost uptake of Grade A office spaces.
"Kenya's office occupancy rate now stands at 77 per cent, driven by the limited supply of prime offices – just 617,000 sqm is expected by the end of 2024, while take-up levels remain steady," said global property consultant, Knight Frank.
The location has welcomed new operators such as Regus, Spaces, and Ikigai, reinforcing its status as the nation’s preferred office hub.
"Despite the positivity surrounding flexible offices, prime office rental rates have fallen by 15 percent over the past four years to Sh1,685 ($13) per square metre, underpinned by the historic supply overhang," added Knight Frank.
Mark Dunford, Knight Frank Kenya's chief executive officer says there is a continent-wide increased demand for grade A offices, particularly those with environmental, social, and governance (ESG) ratings.
“This mirrors a global move towards more sustainable buildings, not only because the built environment is responsible for 40 percent of global carbon emissions, but also because of the direct link between talent attraction, retention and the occupancy of ESG-compliant buildings,” said Mr Dunford.
Kenya saw a steady increase in the supply of Grade A office space from 2010 as the country established itself as a regional hub for international investors, governments, diplomatic missions, and multinational corporations.
This led to the rapid expansion of the commercial hubs of Upper Hill and Westlands, which attracted businesses away from the Nairobi central business district where accessibility and supply of Grade A offices were limited.
The demand for space dropped substantially in the wake of the economic downturn brought by the Covid-19 pandemic outbreak, which forced many businesses to adopt remote working practices from 2020.
