The office market in Kenya is shifting as more businesses and employees favor in-office work arrangements. Despite global trends leaning towards remote work, many companies in Kenya continue to prioritize office-based work due to factors such as operational efficiency, supervision, and collaboration.
Office Demand Remains Strong
The demand for office spaces in Kenya remains steady. While some global companies have adopted hybrid work models, Kenyan businesses still see value in physical office setups. The latest market update shows that prime office occupancy rates in Nairobi declined slightly from 77.2% in the first half of 2024 to 72.7% in the second half. The drop is due to an oversupply of office spaces rather than a decrease in demand.
Office Space Supply and Rental Trends
The Kenyan office market has historically faced an oversupply of commercial buildings. Developers have slowed down new office space projects in response to market conditions. However, some notable office developments, such as Purple Tower along Mombasa Road and Matrix One in Westlands, were completed in 2024.
Despite the fluctuating occupancy rates, monthly prime office rents have remained stable at USD 1.2 per square foot. The stability indicates continued interest in office spaces, even as companies evaluate their long-term leasing needs.
Market Faces Currency Challenges
A significant challenge facing the office market is currency volatility. Many landlords prefer to lease office spaces in U.S. dollars to hedge against foreign exchange losses. However, most tenants prefer Kenyan shilling-denominated leases due to the nature of their businesses. Because it is currently a tenant’s market in Kenya, landlords often must accept leases in Kenyan shillings to keep their spaces occupied.
The Future
While remote and hybrid work trends continue to evolve globally, Kenya’s office market remains resilient. The stable rental prices and continued interest in prime office spaces suggest businesses still recognize the benefits of in-office work. The shift towards sustainability in office buildings is also gaining momentum, with more companies adopting eco-friendly designs during office fit-outs.
Demand for structured work environments, a strong corporate culture, and opportunities for collaboration will ensure the Kenyan office market remains a key component of business operations.