The skyline of Upper Hill, a neighbourhood in Kenya’s capital Nairobi, is dotted with skyscrapers clothed in proud architectural designs. Being on an elevated ground, it visible right from the city centre.
Soon, it is going to be the home of The Pinnacle, a 70-storey twin tower that is set to dwarf Africa’s tallest buildings.
But despite being seen as the budding financial hub where key players in the economy converge, a worrying trend is emerging that threatens to take the shine away from Upper Hill.
Despite rent dropping for the last two years, Upper Hill has not been able to stop relocations from the area, according to Johnson Denge, Senior Manager for Regional Markets at Cytonn Investments.
“Upper Hill has been the go-to zone for the last 20 years but if you look at it now in terms of people who value working space with ambient environment, it is quite challenging,” says Mr Denge.
“Other factors are also at play. The little expansion done on the road is not enough and congestion has crept in faster than anticipated. This is because development came in faster than infrastructure.”
Soft drinks maker Coca-Cola said late last month it was vacating its regional offices from Upper Hill area to Lavington, a “more open and less formal” environment to afford its staff creativity and innovation.
Regional general manager Ahmed Rady said the new work station will offer more hang-out place, something that was not possible in Upper Hill. Mr Denge says the change in regulations to make Upper Hill accommodate very tall buildings must have spoilt the ambience the multi-national was enjoying previously.
“Coca-Cola came in earlier before high plot ratios were granted. They were dwarfed by neighbours who joined and were no longer enjoying the environmental benefits they had before,” he said.
The move means the iconic Coca-Cola Plaza ends a decade-stay and will see it start paying rent in an era where many firms are keen to cut costs.
“It is true paying rent is costlier than being in our own building. But I think that with the space we have found, the right decision was to go into renting because this is one place that fitted all our criteria,” Mr Rady said adding that staying would cost the firm millions of dollars in coming years.
Coca-cola’s announcement came hardly three weeks after European Union Delegation for Kenya signed a long-term lease for the relocation of its headquarters from Upper Hill to Dunhill Towers in Westlands.
Dunhill Towers on Waiyaki Way is close to Sarit Centre and the newly developed Park Inn by Radisson Hotel.
“EU has been searching for appropriate office space that meet our stringent needs for security, ambience, convenience, amenities, and parking for a number of years. Dunhill Towers has met these requirements,” EU Delegation deputy Ambassador Bruno Pozzi said of the move.
With this decision, Upper Hill lost yet another client it had hosted for nearly two decades. Dunhill’s Project Director Bharat Doshi said EU took up half of the 21-storey building. He expects the rest of the building to be full by March next year, riding on EU’s vote of confidence.
“Westlands is fast becoming the new hub for businesses with easy access all round. This building stands out for its high parking ratio of over three parking slots per 1,000 square feet and more than 85 dedicated visitors parking slots,” he said of the location.
According to Mr Denge, at one point Upper Hill’s land was quite expensive and it pushed investors to go for as many floors as possible to get value for their investment. But this has turned counterproductive.
“There is the issue of congestion which has creeped in. If you look at the ambience in terms of greenery, it has quite dwindled. People who value a good workplace are finding it hard,” says Mr Denge.
Another exit from Upper Hill came from audit and advisory firm PricewaterhouseCoopers in 2014 which moved to Delta Corner on Waiyaki Way, joining its rival Deloitte which has its offices there. Later, KPMG Kenya followed from Nairobi Central Business District to ABC Place on Waiyaki Way.
Other relocations that have benefited Westlands are Barclays Bank Kenya’s head office transfer from CBD West End building next to Safaricom. Tullow Oil also followed.
Mr Denge says areas such as Westlands, Waiyaki Way, Karen, Gigiri and Lavington have emerged as the biggest beneficiaries in this migration, leaving Upper Hill to go to “sleep” as early as 6 pm.
“Westlands is a city within a city. It is almost self-contained zone. If we were to destroy the rest of Nairobi, it can sustain itself unlike Upper Hill that still depends on other areas’ amenities including shopping areas and accommodation,” he explains.
Upper Hill is home to high end hotels such as Radisson Blu and Crown Plaza but barely no middle-level eatery places. This has condemned many workers to the many informal food joints along the road. In addition, traffic jam is a also a nightmare.
“Westlands scores big here. It has access to key areas like Kitisuru where mid and high end executives would want to live and they are easily accessible from Westlands as opposed to Upper Hill,” says Mr Denge.
He says the only way Upper Hill can redeem itself is by developers adopting mixed use structures where a single development allows work, play, shopping and accommodation.