The Sh5 billion building opened its doors for business in July last year after more than five years of construction, adding some 300,000 sq feet of Grade A office space in Nairobi’s fastest growing commercial district.
Located on Hospital Road in Upper Hill, the 33-storey UAP Old Mutual Tower, which stands 163m tall with an altitude of 5,700 feet above sea level, unseated Rahimtulla Tower as the highest point in Nairobi.
But the tower’s prestige has not been enough to fill its offices. According to the UAP Old Mutual Group CEO Peter Mwangi, the building’s occupancy now stands at about 35 per cent and the company is hoping to realise full occupancy by December 2018.
During its opening last year, the company said it had put up for lease 300,000 sq feet of Grade A office space and 25,000 sq feet of retail space at rents of between Sh120 and Sh180 per sq feet.
The minimum office space offering had been capped at a minimum space of 3000 sq feet – which translated to a monthly rent of Sh360,000.
Real estate firm MML had earlier warned of cautioned investors to conduct detailed market studies before undertaking projects so as to avert an office-space glut that was projected to hit the market this year.
“We predict that by the end of 2016, there will be over 2.8 million square feet of offices (nearly a fifth of the total space delivered since 2009) lying vacant,” MML said in its Office Market Report for 2014.
MML’s projection has come to pass and real estate agent Knight Frank now holds that “the high levels of new supply of commercial office space have negatively affected rental levels and occupancy rates.