Shortage of office space looms in Westlands
Westlands and Waiyaki Way will experience a shortage of office space this year as most corporate organisations jostle for space in the area, a new report by Mentor Management shows.
There is also a looming oversupply in Upper Hill office space, followed by general oversupply across the city by 2016.
The report outlines the current status and outlook for the city’s seven office areas: Mombasa Road, Kilimani/Karen, Upper Hill, Central Business District, Waiyaki Way, Westlands and Parklands and Gigiri. It also analyses the potential for Thika Road to emerge as the eighth.
According to Mr James Hoddell, CEO of Mentor Management, Mombasa Road is currently oversupplied and suffering from high vacancy rates. Asking rent for Grade A office is Sh75 per sq ft, and Grade B at around Sh62.
“The lower demand on Mombasa Road is a direct consequence of traffic congestion,” he said
Mr Hoddell predicted that opening the Southern Bypass which will link Mombasa Road to Kikuyu, offering a way around the CBD for through traffic, will in the next three to five years lead to improved uptake for Mombasa Road offices.
The other source of office oversupply will be Upper Hill where occupancy of Grade A offices has been high, at 95 per cent.
But a sharp supply increase, with an additional 2.28 million sq ft in two years will lead to oversupply and competition for tenants.