Nairobi suffers over-supply of office units

[mulisaaa]

Nairobi suffers over-supply of office units – KBC
By
vincent wambugu
-
March 12, 2018

Kenya’s the real estate sector is facing the hard reality of more office units and few tenants after a decade of neck-speed growth.

The situation is dire in Nairobi which is suffering from a huge over-supply of office units. The situation has been compounded further by slow economic growth and last year’s long electioneering process.

But real estate firm Cytonn, a victim of the glut, says Nairobi had a total supply of 32 million square feet of office space by December 2017.

In the last ten years, Nairobi has been a huge construction site, literary. The city’s skyline has been turned into a massive scaffolding arena with heavy trucks fighting for space in congested city alleys to deliver construction materials.

Though signs of a looming oversupply of office space started to manifest five years ago, developers decided to bury their heads under the sand.

The city is now faced more than 5 million square feet of empty office space. But the number could be higher than quoted.

Upperhill and Westlands that have been the darling of developers are the hardest hit by the glut. Skyscrapers that were completed 3 years ago are reported to have an occupancy rate of 50 percent.

According to Cytonn Investments, Nairobi had a total supply of 31.8 million square feet of office space while only 3.5 million square feet of office space were delivered in 2017.

The average occupancy level dropped in 2017 to 83.2% from 88.0% in 2016. Cytonn quotes protracted electioneering period, tough operating environment due to low credit supply as the main culprits.

The market is expected to face more uncertainty in the next 3 years.

 

[Mkikuyu- Akili timamu]

When a Country Cuts down its foreign income earning coffee and tea plantations to setup multimillion dollar Real estate which no one can afford due to poverty,then you know you have a failed state

 

[mulisaaa]

When a Country Cuts down its foreign income earning coffee and tea plantations to setup multimillion dollar Real estate which no one can afford due to poverty,then you know you have a failed state

Ukiona Uhuru ka shusha mikono kwa Odinga jua mambo nimabaya sana

 

[pingli-nywee]

Office rental costs are going to go down a plus for small and mid-size businesses. Meanwhile, the real estate sector is shifting to living space. Win-win for everyone. Nyumba si miparachichi, eti baada ya miaka saba itaanza kunyauka.

 

[Mkikuyu- Akili timamu]

Office rental costs are going to go down a plus for small and mid-size businesses. Meanwhile, the real estate sector is shifting to living space. Win-win for everyone. Nyumba si miparachichi, eti baada ya miaka saba itaanza kunyauka.

Tell Me sir Whats the meaning of Internal rate of return(IRR)..And when you finish that, tell why Real estate can be a better source of income especially much needed Foreign income than Coffee and Tea bushes

 

[mulisaaa]

Office rental costs are going to go down a plus for small and mid-size businesses. Meanwhile, the real estate sector is shifting to living space. Win-win for everyone. Nyumba si miparachichi, eti baada ya miaka saba itaanza kunyauka.

Kuna cost of maintenance

 

[Mwanzi1]

Hii sio shida ya office premises alone, even business premises are struggling to fill their empty shops.

 

[pingli-nywee]

Tell Me sir Whats the meaning of Internal rate of return(IRR)..And when you finish that, tell why Real estate can be a better source of income especially much needed Foreign income than Coffee and Tea bushes

Who said coffee and tea bushes were being replaced by real estate as an intiative of the government? Land is private property in Kenya and when you put climate change and growing population into perspective, land use becomes a personal decision. Shida unapenda kuchanganya bifu zako na za rais Uhuru Kenyatta na maswala muhimu ya Kenya. Ulitaka wapande majani chai Nairobi na kwenye miji mingine mikubwa ndio iweje? Hang-over yako ya kuapishwa kwa Raila ikiisha tangaza ili tuweze kujadili hoja mbali mbali bila hisia za kibinti.

 

[eliakeem]

Office rental costs are going to go down a plus for small and mid-size businesses. Meanwhile, the real estate sector is shifting to living space. Win-win for everyone. Nyumba si miparachichi, eti baada ya miaka saba itaanza kunyauka.

Think about the loan rescheduling. The amortization period will go further, also the borrowing costs will rise over time. Sounds like another SGR in the making. Tembo mweupe.

 

[eliakeem]

Tell Me sir Whats the meaning of Internal rate of return(IRR)..And when you finish that, tell why Real estate can be a better source of income especially much needed Foreign income than Coffee and Tea bushes

Ni msamiati huo.

 

[eliakeem]

Kuna cost of maintenance

Yaaa kuna zile fixed opex kama insurance, statutory taxes, cleanliness, security, marketing....

Lkn kubwa ni riba kama kuna element of debt capital.

 

[mulisaaa]

Who said coffee and tea bushes were being replaced by real estate as an intiative of the government? Land is private property in Kenya and when you put climate change and growing population into perspective, land use becomes a personal decision. Shida unapenda kuchanganya bifu zako na za rais Uhuru Kenyatta na maswala muhimu ya Kenya. Ulitaka wapande majani chai Nairobi na kwenye miji mingine mikubwa ndio iweje? Hang-over yako ya kuapishwa kwa Raila ikiisha tangaza ili tuweze kujadili hoja mbali mbali bila hisia za kibinti.

Acha kuongea kwa hisia kama mwanamke mwenye mimba. Jibu kwa hoja

 

[pingli-nywee]

Acha kuongea kwa hisia kama mwanamke mwenye mimba. Jibu kwa hoja

Umeshika mimba mara ngapi? Ndio maana unaruka ruka kama maharage yanayochemka? Jibu lilikuwa kwa kilaza mwenzako. Meza Eno kwanza.

 

[mulisaaa]

Umeshika mimba mara ngapi? Ndio maana unaruka ruka kama maharage yanayochemka? Jibu lilikuwa kwa kilaza mwenzako. Meza Eno kwanza.

Mbona unakuwa na mihemko. Umeingia breed nini?? Jibu hoja hacha ku bwabwaja

 

[Ian Cruz]

Thats why developments of The Pinnacle,Cytonn towers,Montave ,Avic and 88 Nairobi towers are not only office developments but also a "live,work & play" mixed use developments.Residential,office and commercial complexes.

 

[pingli-nywee]

Mbona unakuwa na mihemko. Umeingia breed nini?? Jibu hoja hacha ku bwabwaja

Eti hacha. Jieleze kwa kikamba naona kiswahili kimekulemea. 😀

 

[mulisaaa]

Thats why developments of The Pinnacle,Cytonn towers,Montave ,Avic and 88 Nairobi towers are not only office developments but also a "live,work & play" mixed use developments.Residential,office and commercial complexes.

jipe mwoyo

 

[Mkikuyu- Akili timamu]

The Real Estate bubble in Kenya Has Gone Bust.
Companies folding and auctioneers everywhere

 

[bukoba boy]

The same in Kampala and Dsm.
The main tenant ambae wanamwangalia muda wote ni serikali.

 

[FRANCIS DA DON]

When a Country Cuts down its foreign income earning coffee and tea plantations to setup multimillion dollar Real estate which no one can afford due to poverty,then you know you have a failed state

Convert those office units into low cost housing units