In 2024, the debate surrounding remote work gained momentum in Kenya’s office market as global employers balanced partial or full return-to-office mandates with popular hybrid models. The government’s directive for civil servants to resume in-person duties, prompted by productivity concerns, contrasted with the private sector’s more flexible approach. Some employees remained hesitant to abandon remote arrangements, leaving offices vacant, but challenges like unreliable home internet connections encouraged others to return, fueling demand for flexible workspaces in prime areas.
Occupancy rates in some office segments surpassed 75% in Q3 2024, reflecting a gradual recovery in commercial real estate. Knight Frank Kenya reported a 72.7% occupancy ratio for Grade A and B offices, highlighting ongoing demand for high-quality facilities. New prime developments include the Global Trade Centre in Westlands, adding 460,000 square feet by 2025, and The Beacon in Upper Hill, delivering 250,000 square feet by 2027.
Developers, however, face mounting challenges from the weakening local currency and USD-denominated loans, which heighten financing risks. Construction costs are also on the rise, partly due to the global emphasis on sustainability and green building certifications that many multinational tenants demand. While such certifications can attract premium occupiers and align with environmental, social, and governance (ESG) standards, they also contribute to higher initial costs. Nonetheless, firms seeking to enhance ESG credentials often prioritize leasing space in environmentally responsible buildings.
EastPark, slated for completion in 2026, will add a further 200,000 square feet of prime space, indicating continued investor confidence in the city’s commercial real estate prospects. This aligns with an overall trend of incremental market stabilization.
Overall, Kenya’s office market is adjusting to shifting work habits, economic factors, and international sustainability trends. While occupancy levels have improved, future performance will likely hinge on both global market conditions and local policy decisions that shape the balance between remote and in-person work.
