Office space in Nairobi has more returns compared to residential properties. This is because there is undersupply of residential houses and the high cost of mortgages for the developers which leads to the increase of the selling price, and the increase is not reflected with the rental rates hence taking long to recover your investment. On the other hand, there are good treturns in investing in office space which most people have not discovered. On average, for a residential apartment in Kilimani, it takes an average of 15 years to recoup your investment, while an office space will take an average of 10 years.
The supply of office space has increased tremendously. Five years ago in 2013, there was approximately 10 Million sqft of office space compared to 2018 which currently stands at approximately 35 Milion sqft of office space. This was attributed to the improved business environment that has led to multinationals opening offices in Kenya, imprpoved ease of doing business leading to increase in the number of SME’s.
Most tenants for commercial properties rent a space for longer periods mostly more than 10 years before they relocate mostly when they grow in income and need a bigger or modern office space. On the other hand, residential houses usually attract short term tenants usually less than 5 or even 2 years. This means that managing an office is easier.
At Kagen Properties & Investments, we have staff ealing specifically with commercial properties to assist in your analysis and the search of ideal investment.
Contact us today.