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Laptrust cuts 16 floors off Ugatuzi Tower project amid office space glut
Laptrust plans to complete the project within 24 months after licensing and commencement of construction, almost five years after retired President Uhuru Kenyatta led the groundbreaking ceremony in December 2020.
The Local Authorities Pensions Trust (Laptrust) has scaled down its planned Nairobi office tower by 16 floors to 34 levels at a cost of Sh3.05 billion, citing reduced demand for office space and increased construction costs.
The pension scheme had planned to construct a 50-storey Ugatuzi Tower for about Sh5 billion, but legal action by some of its members delayed the start of the project for years, leading to the revised plan.
Laptrust has now submitted the changes to the National Environment Management Authority for approval of the office building, which will be built on 1.294 acres at the junction of Argwings Kodhek and Chaka Road in the Hurlingham area.
Laptrust plans to complete the project within 24 months after licensing and commencement of construction, almost five years after retired President Uhuru Kenyatta led the groundbreaking ceremony in December 2020.
The decision to reduce the number of floors by a third is in line with data from the Kenya National Bureau of Statistics, which shows that in 2023, about 34.4 percent of the office space that was advertised for leasing remained unoccupied due to low demand.
Laser Property Services, the development manager for the project, said that the change was also informed by the need to deliver a “positive market return acceptable” to the pension scheme.
“There are no significant changes in the cost but the scheme is now better positioned to deliver an iconic state-of-the-art building that will be certified green in line with IFC (International Finance Corporation) Edge green building standards,” Anthony Mutisya, executive director of Laser Property Services said.
The IFC has developed an Excellence in Design for Greater Efficiencies (Edge) certification system to encourage and reward builders and developers who adopt energy- and water-efficient designs in new construction.
Edge-certified buildings use at least 20 percent less energy or water than conventionally built buildings, making them more affordable to operate and reducing their environmental impact.
Since Laptrust mooted the idea, many changes have occurred in the econom, including the Covid-19 disruption, which reinforced the culture of working from home and co-sharing office space. The demand has been rising gradually, but not to pre-pandemic levels.
Laptrust's plan was challenged in court by the Kenya County Government Workers Union, which cited high costs and the inclusion of some workers. However, they lost the case in 2021.
Laptrust said at the time that the project, christened G48 Ugatuzi Tower, would be delivered on a build-to-sale model, providing a centralised location to facilitate consultation, coordination and support to all devolution stakeholders.
The environmental impact assessment report shows the tower will have two level basement parking floors, a ground floor, two-level parking floors, two-level conference floors, 24 office floors, two floors of restaurant, and a terrace floor. The proposed development will also have shared communal facilities such as parking and restaurants.