Society

Heavy traffic slows down uptake of Upper Hill office spaces

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A section of Upper Hill in Nairobi as viewed from the UAP Tower. FILE PHOTO | NMG

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Summary

  • Most offices in Upper Hill are accessed through traffic-prone Ngong and Mbagathi roads joined at Community area which hosts a number of government departments.

Though the most sought-after areas for office spaces in Nairobi remain Westlands and Upper Hill, Upper Hill is gradually becoming unpopular due to traffic congestion, a real estate report shows.

Also, the area has a high supply of office spaces, forcing landlords to lower rental rates and ease lease terms so as to maintain and attract new tenants, a Broll Kenya report on sub-Saharan markets shows.

Most offices in Upper Hill are accessed through traffic-prone Ngong and Mbagathi roads joined at Community area which hosts a number of government departments.

‘‘Some A-grade buildings in Upper Hill are now charging the equivalent of B-grade rentals,” Malcolm Horne Group CEO Broll Property Group said in the report, adding that there is a notable increased interest in the newer office nodes of Kilimani, Riverside and Karen, where space offerings are mostly A-grade in nature, coupled with low traffic.

Another factor that is driving slow growth is the fact that office market generally suffers from poor pre-lets and pre-sales figures owing to low delivery track records from local developers that affect tenants’ plans.

Vacancies recorded are below 15 per cent save for buildings completed within the last two years, which are still struggling to acquire tenants.

The office sector has remained relatively stable in the first half of 2017 with rental figures and occupancies remaining fairly unchanged.

“This is anticipated to persist towards the end of the second half of 2017 as the effects of the general elections in August wear off, the report states,” the report states.

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