Heavy supply of office space in Nairobi by developers in 2016 has created a glut dragging down the cost of office spaces and yield for developers while making it easier for tenants to afford. Most prime office space addresses in Nairobi have remained vacant for more than 2 years especially on Riverside drive, Westlands and Upper Hill.
The Knight Frank 2017 real estate market hereby tabulated the most cost friendly cities in Africa to rent an office and the general condition of doing business.
See below the cheapest to the most expensive cities to rent an office in US dollars per square meter according to property managers Knight Frank.
Lilongwe $11/sq m yield 12%
Gaborone $11.5/sq m yields 8.25%
Nouakchot $12/sq m yield 11%
Windhoek $14/sq m 8.5%
Antananarivo $15/sq m Yield 14%
Port Louis (Mauritius) $15 yield 8.5
Nairobi $16/sq m and yields 8%
Kampala $17 /sq m yield 10%
Johannesburg $18/sq m yield 9%
Dar es Salaam $21/sq m yield 9%
Bamako $19/sq m yield 12%
Kigali $20/sq m yield11%
Casablanca $20/sq m yield 8.5%
Yaounde $22/sq m yields 10%
Kinshasa $25/sq m 12% yields
Algiers $30/sq m yields 10%
Abidjan $32/sq m 9%yields
Djamena $55/sq m yields 10 yields
Malabo (Equatorial Guinea) $37/sq m 11% yield
Cairo $35/sq m 10.5% yield
Libreville (gabon) $35/sq m 9% yield
Accra $35/sq m 9% yield
Maputo $27/sq m yield 10.5%
Abuja $33/sq m yield 9.5%m
Luanda $80/sq m yileds 14%
Dakar $19/sq m yield 10%
Tunis $10/sq m yield10.5%
Lusaka $20/sq m yield 10%
Harare $10/sq m yield 8%
Developers target office space tenants are now building with more parking space inorder to attract clients who are now spoilt for a choice. Property developers without data revved up office spaces in 2014 to 2015 lifting supply leaving them with empty spaces longer than expected. However Knight Frank maintains the city is still the favorite for foreign multinationals in the region.
Lowest yield on office
Adis Ababa has the lowest yield on office space followed by Harare and Nairobi while Luanda has the highest yield or returns for office space on the continent at 14 per cent.
“The persuasive long-term investment case for Sub-Saharan Africa has drawn increased numbers of international investors to investigate opportunities within the region over recent years,” says Knight Frank.
However transactional activity has been restricted by the limited availability of investment- grade stock and the opacity of the markets outside of South Africa.
Interest in the sector remains heightened, despite the weakening of some Sub-Saharan economies over the last two years