New offices sit empty as Nairobi’s Upper Hill loses shine

Upper Hill’s vacancy levels are quite high.
Upper Hill’s vacancy levels are quite high. PHOTO/FILE
Nairobi’s Upper Hill is feeling the pinch of oversupply as office vacancy rates remain relatively high, according to a report by commercial property services company Broll Kenya.

Upper Hill, the report says, is becoming increasingly unpopular due to the heavy congestion experienced in the area despite being the closest office node to the central business district.

This factor coupled with the high supply of offices in the area has forced landlords to lower rents and ease lease terms in order to maintain and attract tenants.

“Some A-grade buildings in Upper Hill are now charging the equivalent of B-grade rentals. There is a notable increased interest in the newer office nodes of Kilimani, Riverside, and Karen, where space offerings are mostly A-grade in nature,” Broll says in the report.


Rental rates achieved in the area vary depending on the grade of the building, with A-grade buildings recording average monthly rates of Sh126 per square feet (Sh1,365 per square metre), while B-grade monthly rentals average of Sh93 per square feet (Sh1,000 per square metre), both excluding VAT and service charges.

READ: Landlords panic as Nairobi struggles to fill its offices

According to Broll Kenya, worst hit are buildings completed within the last two years, which are “still struggling to acquire tenants”.

“This can be attributed to a poor pre-let uptake, additional stock available and delays in development,” the company said.

“These factors, in some cases, force many tenants to renew their current leases or to find alternative space options thus impacting upon occupancy levels.”

The report, however, notes that there still remains an undersupply of pure A-grade offices in the country.