Kenya’s office occupancy rate now stands at 77 per cent, mirroring a recovery wave hitting other markets in Africa. In its biennial 2024/25 Africa Report, Knight Frank puts recovery across the continent at 75 per cent from 60 per cent in 2022.
- The report says the improvement in office occupancy levels is largely attributed to gradual return to the office following the disruption caused by the Covid 19 pandemic.
- Driven by occupiers’ preference for flexibility, developers are meeting increased demand by expanding the supply of co-working space in the Kenyan market, particularly in Westlands, Kenya’s primary office hub.
- Renowned for prime offices, Westlands has recently welcomed new flexible operators such as Regus, Spaces, and Ikigai, reinforcing its status as the nation’s preferred office hub.
“Despite the positivity surrounding flexible offices, prime office rental rates have fallen by 15 per cent over the past four years to US$ 13 per square metre, underpinned by the historic supply overhang. This trend is however expected to reverse this year as the supply imbalance begins to recede due to rising deal activity. Indeed, average occupancy rates have climbed by 5 per cent to 77 per cent between Q1 2023 and Q1 2024,” notes the report.
Mark Dunford, CEO, Knight Frank Kenya says there is a continent-wide increase in demand for grade A offices, particularly those with Environmental, Social, and Governance (ESG) ratings.
“This mirrors a global move towards more sustainable buildings, not only because the built environment is responsible for 40% of global carbon emissions, but also because of the direct link between talent attraction, retention and the occupancy of ESG-compliant buildings,” he said.
“This occupier behaviour is also encouraging developers to refurbish older buildings to meet the growing demand for ESG-compliant grade A offices. Indeed, this trend is already seen in a number of markets as office landlords move to sustain both demand and occupancy levels.”
Knight Frank’s report for Africa also underscores the shortage of true Grade A supply, which is further being compounded by a limited development pipeline, which highlights a clear opportunity for developers.
Apart from Kenya, co-working space is also gaining popularity in countries like South Africa, Nigeria.
In markets like Zimbabwe, a shift from central business district (CBD) to suburban locations is spurring demand for out-of-town offices. This migration is being fuelled by traffic congestion, deteriorating infrastructure, inadequate parking, high operational costs, and noise pollution in central Harare.
Consequently, CBD areas in Zimbabwe have seen office vacancy rates soar to between 40-60 per cent, according to Knight Frank.
See Also:
