Rising demand to own office space

By Ferdinand Mwongela

Serious attention is being paid to the development of office space, which is a lucrative sub-sector of the real estate industry — one of the most viable investment options in the country.

The office space segment has seen the rise of developers who choose to deal almost exclusively with their constructions.

The office premises for Suraya Property Group. Photo: Martin Mukangu/Standard

Navin Shah, a director with Office Suites Developers in Nairobi, admits there is increasing demand for office space.

"That is why we decided to focus on the development of office space," he reveals. "There is a ready market because more people want to own their own offices rather than rent."

Charges for office suites range from Sh6,000 to Sh16,000 per square foot or more. Interestingly, an increasing number of investors are moving away from the Central Business District (CBD) to the suburbs and outskirts.

First, they moved to Upper Hill, Community and Westlands. Today, more investors are moving to Mombasa Road and outlying areas. Ngong Road, too, is also witnessing its share of office blocks.

In the space of one month, several office complexes have been launched. They include 5th Avenue Suites on Ngong Road, Milford Suites on Parklands Road and Nextgen Park along Mombasa Road. These are being developed by Office Suites Developers.

Niche market

At the same time, South African-based Lancet officially opened a laboratory complex in the city. It is said to be the first of its kind in the country.

In the same week, Suburban Limited, another developer, launched Morningside Office Park on Ngong Road, a five-storey executive office complex with 30 ensuite executive offices and pent office suites. The development is being done with the collaborative effort of Home Afrika, Morningside Developments and InvesteQ Capital.

Launching the office park, Home Afrika’s Managing Director, Geoffrey Luseno, acknowledged the move by the business community towards owning their own corporate space.

The upcoming Sameer Business and Industrial Park. The complex comes complete with a helipad and over 400,000 square feet of office and showroom space. Photo: Jenipher Wachie/Standard

"This is a niche market and there is a growing market for office complexes especially away from the city centre," he says. "A lot of organisations do not want to be in the CBD."

Upcoming residential estates are also incorporating office space and shopping malls in their plans. NextGen Park, for instance, has incorporated residential and office developments in the same complex. State-of-the-art facilities inside include high-speed lifts, a private theatre and spa among others. The Sameer Business and Industrial Park, estimated to cost Sh2 billion to build, is yet another mega office complex on Mombasa Road.

It comes at a time when there is a scramble for office space outside the city centre. The complex comes complete with a helipad and over 400,000 square feet of office and showroom space. It is set to be opened next year and will be managed by real estate agents Knight Frank.

According to the 2009 Knight Frank Africa report, the office market in Kenya is set to be flooded with supply of office space when several developments currently under construction are completed.

Tysons’ Sales Manager Isaac Maira says most commercial developments come with an open plan concept to allow buyers partition and design as they wish.

Need for proper planning

"The buyers vary from corporates, consultants to professionals," he says. "The location of their offices largely depends on the prices, which are also dependent on the location."

Part of the success driving office space development is stability in the market. "There is still demand for office space so long as you have the proper concept," Maira says.

The increased interest in office developments, however, has not been smooth. Areas previously earmarked for residential developments have seen a mushrooming of office developments without commensurate increase in the infrastructure, resulting in increased pressure on the roads and sewerage systems among other facilities.

Areas like Upper Hill, Westlands, Donholm and Embakasi come to mind as they are unable to cope with the increased traffic and population.

Deputy Prime Minister and Minister for Local Authority, Musalia Mudavadi, maintains there is need for proper planning.