Nairobi yet to meet rising demand for top notch offices

Mentor Management Limited CEO Mr James Hoddell speaks during the release of the Nairobi Office Market report at the Serena Hotel, Nairobi, on November 27, 2014. The report predicts construction could leave close to a fifth of the city's newly built offices vacant by end of 2016 especially in Upper Hill and Westlands. PHOTO | SALATON NJAU | NATION MEDIA GROUP

What you need to know:

  • It said available spaces in high-end Upperhill and Westlands in Nairobi can hardly satiate the billionaire’s club market that demands exclusivity.
  • The two areas will continue attracting heavy levels of construction as developers seek to meet detailed demands of high-end clients in terms of quality that is unrivalled globally on matters green technology, water and light efficiency.
  • Mr Hodell said the surge in office completions, up 65 per cent on the previous record set in 2011, is now likely to create oversupply in Upper Hill, Westlands and along Waiyaki Way in Grade B office.

Nairobi is yet to meet the market for top notch (Grade A) offices boasting of outstanding features that comprise superior exterior and interior finishes among others, a new study has said.

It said available spaces in high-end Upperhill and Westlands in Nairobi can hardly satiate the billionaire’s club market that demands exclusivity, 24 hour security, good roads and  ample secure parking lots that are manned, and entire buildings under CCTV surveillance.

The report said the two areas will continue attracting heavy levels of construction as developers seek to meet detailed demands of high-end clients in terms of quality that is unrivalled globally on matters green technology, water and light efficiency.

Mr James Hoddell, the chief executive of construction, project and development management firm Mentor Management Ltd (MML) said in the firm’s just-released 2015 report that multinationals are still looking for exclusive office blocks that send a “splendid, luxurious and affluent statement about their reputation” to their prospective clients.

“The reality is that even in something of a building glut, developers are still offering very few office buildings that are the kind of offices that tenants want to lease,” said Mr Hoddell.

CREATE OVERSUPPLY

Speaking in Nairobi, Mr Hodell said the surge in office completions, up 65 per cent on the previous record set in 2011, is now likely to create oversupply in Upper Hill, Westlands and along Waiyaki Way in Grade B offices, which in total terms could take over four years for the market to absorb.

Letting agents dealing in Class A office spaces sell brands featuring excellent panoramic views, locations, access, air conditioning, lifts and suspended ceilings, among others, to attract high quality tenants seeking environmentally friendly buildings without regard to the exorbitant rents charged. 

The supply of new Grade B space rose from 631,400 square feet in 2013, to 725,991 square feet in 2014 and a million square feet in 2015 with a 2.24 million square feet currently under construction and set to be ready for occupation this year.

Traffic jams in some areas were also blamed for massive exodus of reputable firms to outer nodes around the city that have traditionally been residential zones such as Karen, Thika and Limuru Roads in a bid to reduce commuting and parking costs.

The highly popular Mombasa Road based offices that lost their glitter due to congestion, could rekindle interest once the Southern Bypass is opened to more traffic.

“With more than another three million square feet coming on stream this year, tenants have more choice and will shop around for convenience and quality at the best price, which, for many, is likely to point them towards the city’s outer office nodes. Nairobi may not end up with its own Sandton, but instead, it may now have a number of concentrations in office space around the outer city,” said Mr Hoddell.

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