Multinational companies are driving demand for high-end, sustainability-compliant office spaces in Nairobi with Westlands remaining the most popular location, a new report has revealed.
The report dubbed the Africa office market dashboard for the first quarter of 2023 has revealed that Westlands remained the most popular location for prime offices, two years in a row due to its surplus pipeline of grade A commercial working buildings and is set to topple Upperhill, Kilimani and Mombasa road.
Major global powers’ interest in Africa that have committed millions of dollars in sustainable projects including the United States, the United Kingdom, South Korea, and China among others are expected to trigger an influx of multinational corporations in hubs like Nairobi and Johannesburg.
“Consequently, the office market in these cities is witnessing a recovery, with Grade A offices registering lower average vacancy levels of around 20 percent,” said Knight Frank in the report.
“Across the continent, there is a growing demand for best-in-class and ESG-compliant offices, however, the supply of such stock remains low.”
“Despite this number being a fraction of the 120,000 global green buildings, markets such as Nairobi, Accra, and Lagos have recorded over 200 per cent increase on average in the past three years.”
The United Kingdom government announced in March this year that it had committed alongside other developed countries through the United Nations Framework Convention on Climate Change (UNFCCC) to a collective target of providing and mobilising $100 billion in climate finance a year for developing countries from public and private sources.
About $2 billion was to be invested in sustainable projects across Africa, while the US pledged an initial $200 billion for its partnerships for Global Infrastructure Initiative.
Britam Tower was recognised as one of the ten iconic ESG-compliant office buildings on the continent, alongside 35 Lower Long in South Africa, CFC’s first tower in Morocco and PPF tower in Tanzania among others.
The Nairobi Expressway has opened up Westlands and cut the commute for office workers.
Collins Chacha of Universal Homes said that the Expressway had shortened commuting from Nairobi’s satellite towns for those working in Westlands, where most offices and potential homebuyers work.
“As a result, Westlands has become the most popular office location in Nairobi due to its substantial share of grade-A commercial office space compared to competing nodes like Upperhill, Kilimani, and Mombasa Road,” said Knight Frank.
Investors have also shown a growing preference for rent payments in dollars due to the ongoing depreciation of the Kenyan Shilling.
“The average monthly prime rents have stabilised at US$13 per square metre, attributed to the completion of high-quality office developments and the increasing demand for premium properties,” said Knight Frank in the report.
