Africa’s Office Market Splits Into Two Tiers, Knight Frank Finds

Africa’s office sector is dividing into winners and losers. Buildings run to a standard are pulling away from ageing stock, according to Knight Frank’s Africa Offices Market Dashboard for H1 2026, which tracks prime office performance across the continent’s leading cities.

The report finds that occupiers concentrate demand on buildings that operate without interruption and meet a quality bar. That shift is driving occupancy and rents in the buildings that clear the bar, while older stock falls further behind. In January, Kofisi shut two of its Nairobi centres after losses, while demand kept shifting toward Grade A space in prime nodes.

Nairobi leads the region’s gains

Nairobi delivered the strongest improvement Knight Frank recorded on the continent. Grade A office occupancy rose from 81.5% in December 2025 to 84.8% by June 2026, while prime rents held at around US$13 per square metre a month. Limited new Grade A supply, paired with steady absorption of existing stock, kept the market tight.

Developers are responding. Two Rivers International Finance and Innovation Centre announced plans for a 22 storey Grade A office tower in January, pointing to occupancy in its existing tower at full capacity and Grade A occupancy across Nairobi climbing to 77.7% by June 2025 in Knight Frank’s earlier count, a figure the H1 2026 report has since revised to 84.8%.

Ben Woodhams, Partner at Knight Frank’s Africa Desk, said the pattern extends across the region.

“While prime office rents remained broadly stable across most markets that we track, Grade A occupancy strengthened in several leading locations as tenants focused their demand on buildings offering better quality, higher sustainability credentials, reliable services and optimum operational efficiency,” he said.

Kampala, Dar es Salaam and Lusaka show the same split

In Kampala Grade A occupancy reached 87%, ahead of 83% for Grade B space. Prime rents held around US$17 per square metre a month, but landlords of older buildings now lean on rent concessions and fit out contributions to keep tenants.

Dar es Salaam posted Grade A occupancy of 80%, with prime rents at around US$15 per square metre a month and yields near 9%. In Lusaka, Grade A rents ranged between US$16 and US$18 per square metre a month, with occupancy between 70% and 80% depending on location and building standard. Buildings in Kabulonga, Rhodes Park, Mass Media and parts of Longacres continue to outperform CBD stock.

Khusoko reported last year that Kampala faced a 100,000 sqm wave of new Grade A space by the end of 2025, and Dar es Salaam had already posted a five point rise in occupancy to 75%, driven by flexible leasing and less speculative construction. Both trends have since carried through into this year’s figures.

Boniface Abudho, Africa Research Analyst at Knight Frank, called the shift a repricing of what tenants value. “We are seeing a structural repricing of what occupiers consider valuable office space,” he said.

“Quality, reliability, flexibility and operational efficiency are increasingly determining leasing decisions, creating a clear divide between buildings that meet evolving occupier requirements and those that do not.”

Flexible space moves into the mainstream

Beyond the landlord and tenant relationship, flexibility now defines how Africa’s office market operates, Knight Frank notes. In Nairobi, IWG expanded with three centres during the period: Nairobi Business Park on Ngong Road, 1 Park Avenue in Parklands and I&M Tower in the CBD. The demand for agile space has built over several years. Coworking operator Nairobi Garage, for one, opened its fifth Nairobi site in the CBD in 2022, citing higher returns from serviced offices than unfurnished space.

In Egypt, IWG Spaces signed a lease of roughly 16,000 square metres at The Ark Business Park in New Cairo, a deal that shows flexible operators now sit inside the institutional office market rather than confined to swing space.

Serviced offices are gaining ground in Tanzania and Uganda too, as occupiers look for shorter commitments, lower upfront costs and room to scale their footprint as needs change.

Occupiers want smaller, not bigger

Across several markets, tenants are consolidating rather than expanding, trading headquarters for smaller, more efficient layouts. In Lusaka, demand centres on suites of roughly 50 to 350 square metres, while floors of 500 to 1,500 square metres attract far less interest.

Malawi shows the same pattern for different reasons. Corporates there put cost efficiency ahead of floor space, and NGOs cutting their footprints have softened demand for larger offices in Lilongwe, where vacancy now sits between 15% and 25%.

What actually decides a lease

Location alone no longer wins tenants. Knight Frank points to backup power, parking, building specifications, property management, security and tenant amenities as the factors now driving leasing decisions. In Cairo, parking has become a constraint, since the standard allocation of one bay per 100 square metres cannot keep up with demand in dense business districts. In Kampala and Lusaka, power supply and building management increasingly separate buildings that perform from those that do not.

That logic is pushing occupiers out of city centres altogether. Businesses are relocating to mixed use and suburban nodes that offer access, parking and amenities under one roof. In Zimbabwe, companies are moving to lower density locations for access, security and flexibility. In Durban, demand keeps concentrating in nodes such as Umhlanga and La Lucia, where mixed use developments continue to draw tenants away from older CBD stock.

The bigger picture

Buildings that deliver power, security and management without fail command occupancy and steady rents, while ageing stock faces a gap that concessions alone cannot close. For landlords across East Africa, the message from this dashboard is direct: upgrade, adapt, or watch tenants leave for buildings that already do.