Gigiri and Karen were the best performing submarkets in quarter 1 of 2021 where the market average was 6.8%.
According to Real Estate firm Cytonn, the commercial office sector recorded subdued performance attributed to reduced demand of office spaces as businesses restructure their operations hence scaling down, oversupply in the commercial office sector, tough economic environment brought about by Covid-19, and declines in occupancy spaces as businesses continue to embrace the working from home strategy.
However, Gigiri and Karen were the best performing submarkets in January – March, 2021 recording rental yields of 8.3% and 8.0%, respectively. This was attributed to their superior locations, availability of high-quality office spaces charging prime rental prices, relatively good infrastructure, and low supply of commercial office spaces within the markets.
Thika Road and Mombasa Road were the worst performing commercial office nodes within the Nairobi Metropolitan Area.
They recorded rental yields of 5.3% and 4.7%, respectively attributed to the effect of traffic snarl-ups, low-quality office spaces, and zoning regulations as Mombasa Road is mainly considered as an industrial area, while Thika Road is a popular residential hub, thus making the locations unattractive to business firms.
Full report here