Almost 10 years since Coca Cola launched its East and Central Africa operations headquarters, located in Upper Hill, the company is seeking to sell the property. Coca Cola also wants to move out of the current location.
One of Nairobi’s most sought after address by corporates and multinationals, Upper Hill, has suffered spillover effects of the heavy traffic associated with the CBD and other feeder roads. The commercial hub has fallen out of favour with some firms and organizations who have in recent times cited difficulties in traffic flow as a major bug.
Recently, the European Union announced their relocation to Lavington and Coca Cola is next in line after announcing that they will also be relocating their premises to Lavington.
The multinational, now plans on selling the 66,360 Square feet building which has served as its headquarters since 2008 even as it shifts base to the newly built 90 James Gichuru in Lavington. If sold based on its current valuation the building would fetch KSh. 1.03 billion up from the cost to build which was KSh. 700 million, recording KSh. 300 million in fair value gains. However this is unlikely under current market conditions.
Upper Hill has been a chief contributor in the commercial supply glut that has prompted price corrections in the market over the past two years. According to Cytonn, current oversupply in the market stood at about KSh. 5.3 million as of February 2018 which equates to KSh. 70.9 billion in opportunity costs at current market rates.
According to Knight Frank, absorption of Grade A and B office space increased by 12% in the first half of 2018 and was expected to increase more in the second quarter but this is yet to keep pace with supply. As a result, prime asking rents reduced marginally in the period to about KSh. 130/sqft/month.
Now, Coca Cola may be willing to consider lower bargains despite the fact that the building has many state of the art green building features to offer. These include solar heating, rain water harvesting, energy conservation devices and a roof garden that acts as a recreation area in addition to heat control.