The Nairobi commercial office space market has been steadily recovering from the recession phase into the recovery phase according to Fusion Capital, a Private Equity Firm focused on Real Estate Investment and Fund Management based in East Africa.
“Rental rates have come down significantly, and office space has become very cheap despite the wider economy continuing to perform,” says Fusion Capital.
However, “There is very little money in the market so prices are not expected to fall further meaning that now is the time to buy!
According to Fusion Capital, even though some large scale projects (approved before 2016) are still being developed, the number of new schemes being approved has dropped off dramatically. Kenya National Bureau of Statistics (KNBS) data that shows that last year’s approvals were the lowest since 2014.
On the other hand, Cytonn Real Estate says “Office space and residential units in a Mixed Use Developments have higher rental yields at 8.2% and 5.6% compared to the market average at 7.9% and 5.0% mainly attributed to higher rents and prices charged due to amenities and facilities provided.”
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Vaal Real Estate, a local realtor’s report ‘Investing In Nairobi -Real estate Opportunities’ highlighting the performance of the Nairobi real estate sector in 2018 found out that “The current office space supply in Nairobi is estimated at 1.8 million m², with approximately 200,000m² delivered in 2018 registering a growth of 25% from 174,000m² in 2017.”