Kenya’s average office occupancy rate has risen by 5pc to reach 77pc above Africa’s average occupancy rate of 75pc on subdued supply according to latest data by property firm, Knight Frank.
Knight Frank’s 6th edition of The Africa Report 2024/25 shows that the risen in office occupancy was due to the gradual return to the office following the disruption caused by the pandemic.
Kenya however reported limited supply of prime offices with just 617,000 square metres expected by the end of 2024 with take-up levels expected to remain steady.
“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 40pc of global carbon emissions, but also because of the direct link between talent attraction, retention and the occupancy of ESG-compliant buildings,” said Mark Dunford, Knight Frank Kenya chief executive officer.
The report further shows the preference for flexibility among occupiers particularly in Westlands which is Kenya’s primary office hub.
“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,” he added.
Recently, Westlands has recently welcomed new flexible operators such as Regus, Spaces, and Ikigai, which the firm says has reinforced the area as the nation’s preferred office hub.
Nonetheless, despite rising occupancy rates, Kenya’s offices attracted lower rents when compared to other markets such as Uganda, Egypt, South Africa and Nigeria which have continued to witness increased demand for co-working spaces.
“Despite the positivity surrounding flexible offices, prime office rental rates have fallen by 15pc over the past four years to $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,” the firm says in the report.
