Rebounding economy firms up office uptake

The commercial office sub-sector continues to see better tidings as the wider real estate beat and the country’s economy re-emerges from the depths of the COVID-19 pandemic.

According to a new note by consultancy Knight Frank, the Nairobi hub has marked increased interest especially by multinationals eyeing to move into the market or expand current operations.

“We continue to see the trend of Nairobi being the regional focus as multinationals confidence returns and they look to either enter the market here for the first time or expand their existing operations. There are noticeable indications of increased take up and larger transactions starting to return to the market,” Knight Frank notes.

Earnings from the sector nevertheless remain subdued as prices come under pressure from continued supply glut alongside a poorer quality of stock.

According to Knight Frank’s second quarter Africa office Market dashboard, financial sector businesses are leading the new uptake of office spaces.

This ahead of businesses in industry & logistics, non-governmental organisations (NGOs), business and professional services, construction and telecoms.

In spite of the uptick in demand for commercial office spaces, Knight Frank has retained a cautiously positive stance on the near-term outlook for the sector.

The gradual return of business confidence is aligned to an increased number of businesses registered.

According to data from the Registrar of Companies, the number of companies registered in July registered a 25 per cent month on month growth change with 8,483 entities registered.