Demand for Grade A Offices Up as Firms Seek Quality

Demand for high-quality ‘Grade A’ office spaces in Nairobi is far outstripping supply as local and international blue chip companies seek premium workspaces for their staff.

Grade A offices, which are structures built to international standards and fitted with high-quality finishes, are doing extremely well at a time when most landlords are struggling to fill their spaces amid office glut.

According to a Broll Property Group study covering the first quarter of 2017, Nairobi is experiencing a chronic shortage of high-quality offices amidst fast-rising demand from local and international clients.

“Key challenges within the office market continue to be a limited supply of pure Grade A office developments in Nairobi as per international standards,” Broll said.

Despite the premium prices, tenants are eager to secure spaces as soon as ground is broken, with some willing to wait up to two years for completion.

East African Breweries Limited (EABL) has, for example, taken up space at the Garden City Business Park on Thika Road a year before its completion in the first quarter of next year.

The Nairobi Securities Exchange-listed brewer on February 26 signed a lease with the developer, UK private fund Actis, which will see it occupy 7,500 square metres of space at the Grade A office complex.

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This will see the EABL shifting some of its core functions from its current headquarters in Ruaraka – just a short distance from Garden City.

“A good working environment for our employees is something that we place a big premium on. This move ensures the teams moving in can reside in a fresh and positive workspace,” EABL managing director Andrew Cowan said in a statement.

Garden City Business Park, whose phase one is due for completion next year, will provide more than 25,000 square metres of lettable Grade A offices with two hotels, a health facility and over 400 mid-market residential units.

According to Cytonn, only five per cent of Nairobi buildings are pure Grade A offices. Gigiri is the hub for such office spaces where 75 per cent of the total office stock is premium.

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