Kenya has recorded a spike in the uptake of office space surpassing the continents average, according to global property consultant, Knight Frank.
This has seen property owners with old buildings forced to undertake major renovations in an effort to remain competitive and keep up with the changing market demands.
The consultancy firm in its biennial 2024/25 Africa Report says that, office occupancy levels in Kenya rose to 77 percent slightly above Africa’s average of 75 per cent.
Across the continents office markets have recovered from 60 percent that was recorded in 2022, largely attributed to the gradual return to the office following the disruption caused by the pandemic.
For example, Kenya's office occupancy rate now stands at 77 percent, driven by the limited supply of prime offices – just 617,000 sqm is expected by the end of 2024, while take-up levels remain steady.
According to Knight Frank Kenya, CEO Mark Dunford, there is a continent-wide increase in demand for grade A office, 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 40 percent of global carbon emissions, but also because of the direct link between talent attraction, retention and the occupancy of ESG-compliant buildings," said Dunford.
He notes that this occupier behaviour is also encouraging developers to refurbish older buildings to meet the growing demand for ESG-compliant grade A office.
"Indeed, this trend is already seen in a number of markets as office landlords move to sustain both demand and occupancy levels" added Dunford.
The Knight Frank's flagship report for Africa also underscores the shortage of true Grade A supply, which is further being compounded by a limited development pipeline, which highlights a clear opportunity for developers.
Separately, co-working space is also gaining popularity in countries like South Africa, Nigeria, and Kenya. In Kenya, fresh leases by Regus, Spaces, and Ikigai are catering to the growing demand for flexible work environments.