Nairobi’s office market closing stock stood at an estimated 620,000m2 according to JLL’s Nairobi City Report for 2017. In recent years, demand for office space has shifted to nodes outside the heavily congested and dilapidated CBD led by large corporate tenants on the demand side and a construction streak lead by insurance companies on the supply side. Even small and medium enterprises have jumped at the opportunity to claim their share of the brisk shiny new office spaces available.
With the surge in supply, finding office space may be relatively easier. Every market has various types of office space.
Office space is generally graded into three categories which reflect the overall quality of the office space. The overall quality in a broad sense represents the ranking in terms of parameters such as location, security, accessibility, maintenance, aesthetics et cetera.
Refers to the yard stick of all other office space in the market. Usually, these are characterised by excellent prime locations, seamless accessibility, monumental architecture, top-notch tenants and professional management in addition to the highest rental rates in the market. Due to market dynamics however, grade A office space is not static standard and what might be considered as grade A in market X could be grade B in another market and vice-versa. In Nairobi, these kind of offices will mostly be found in locations such as Upper Hill, Westlands, Mombasa Road and Gigiri.
These refer to those buildings that fall short of being classified as grade A. Although they are also functionally well packaged, they usually lack the sort of superior clout associated with grade A buildings. They have the average to above average kind of location, accessibility, infrastructure and security and therefore an alternative to those tenants who cannot make good the consideration for grade A office. Grade B office space is also characterised by older buildings some of which have been downgraded from grade A over time.
Every market has mechanisms to provide for all market segments. Grade C office space caters for those tenants who prefer low rental rates at the compromise of location, accessibility and high quality maintenance. They are of a much lower cadre compared to grade A and B offices even though some grade C offices are not in actual sense office buildings but extensions of other businesses. Grade C buildings are much older than grade B buildings and in some cases may need extensive repairs. Class C commercial buildings are usually the target for urban regeneration initiatives.
Whatever type of office you require this year, there is currently more than enough in the market.
In this whole commercial office enterprise, nothing stands out as the monumental grade A office space or the dilapidated grade C office buildings.