Kenya’s office market rebounds, mirroring a trend across Africa. Knight Frank’s report shows the continent’s average office vacancy rate at 25%, down from 40% in 2022.
This improvement is attributed to employees gradually returning to offices after the COVID-19 disruption.
The rise in demand is particularly noticeable for flexible workspaces like co-working spaces (shared office environments with flexible leases).
Developers are expanding co-working options in Kenya, especially in Westlands, the country’s primary office hub. This trend is driven by occupiers’ preference for flexibility and coincides with the arrival of new co-working operators like Regus, Spaces, and Ikigai in the Westlands.
Despite the positive outlook, prime office rental rates remain low at US$13 per square meter, likely due to a previous oversupply of office space. However, the report predicts rising occupancy rates will eventually lead to rent increases.
Mark Dunford, CEO of Knight Frank Kenya, highlights a growing demand for Grade A offices (high-quality buildings with modern amenities) across Africa, especially those with strong Environmental, Social, and Governance (ESG) ratings.
This trend reflects a global shift towards sustainable buildings, driven by environmental concerns and the link between ESG-compliant spaces and attracting and retaining talent. Consequently, developers are increasingly refurbishing older buildings to meet this demand for sustainable Grade A offices.
Knight Frank’s report also identifies a shortage of true Grade A office space in Africa, with a limited development pipeline, presenting a clear opportunity for developers.
“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,” Mark Dunford says.
The popularity of co-working spaces extends beyond Kenya, with growing adoption in South Africa and Nigeria.
In contrast, Zimbabwe’s office market sees a shift from the central business district (CBD) to suburbs due to traffic congestion, infrastructure issues, and high costs in central Harare.
This has led to a surge in CBD vacancy rates, reaching 40-60% according to Knight Frank.
