Broll Kenya, however, points out there still remains an undersupply of pure A-grade office developments in Kenya.
Approvals in the construction of new office buildings trended down last year but developers say some areas of Nairobi are still headed for oversupply.
This is according to a report by commercial property services company Broll Kenya that, however, points out there still remains an undersupply of pure A-grade office developments in Kenya.
“The supply of office space was slower than previous years with the approval of office developments dropping in 2016 as compared to previous years,” says the half year report.
The report says areas hurtling towards glut include Westlands, which hosted the highest office supply at 29 per cent of available space.
Upper Hill and the central business district followed with 24 per cent and 20 per cent respectively, according to the report.
As such, Upper Hill and Westlands were shown to have the lowest occupancy rates in regard to developments completed within the last two years.
“This can be attributed to a poor pre-let uptake, additional stock available and delays in development,” says the report.
“These factors, in some cases, force many tenants to renew their current leases or to find alternative space options thus impacting upon occupancy levels.”
The report says key challenges in the Kenyan office market continues to be slow increase in supply within new office locations, for instance, Gigiri and Karen, as well as a limited supply of pure A-grade office developments in Nairobi as per international standards.
Grade A offices have certain attributes including raised floors, certified green buildings and highly specialised fire suppression systems, suspended ceilings, lifts, air conditioning and other state-of-the art features and facilities.
They are furnished to the highest specifications out there.
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