Nairobi’s prime office occupancy has increased from 77.7% to 80.3% in the second half of 2025, trailing regional peers, with occupancy estimated at 85% in Kampala and about 80% in Dar es Salaam.
The performance reflects a gradual recovery in demand for high-quality commercial space, according to a new report by Knight Frank.
Despite improving occupancy, prime office rents in Nairobi remained flat at KSh 1,676.54 (US$13) per square metre per month. The Kenyan office market continued to experience growth stagnation through H2 2025, supported by steady absorption in Grade A space and a subdued development pipeline.
“The second half of 2025 confirms a clear market revaluation of quality, with ESG credentials and flexibility becoming central to both leasing and investment decisions. While secondary stock faces mounting pressure, prime, well-located, and sustainability-aligned buildings are demonstrating resilience, pricing power and reduced vacancies,” said Mark Dunford, CEO of Knight Frank Kenya.
According to the report, leasing conditions in Nairobi remain tenant-favourable, with occupiers retaining pricing and structural leverage. Negotiations are increasingly driven by cost optimisation, building efficiency and ESG credentials rather than headline rents alone.
Across the region, Uganda’s office market also remains tenant-led, with rental growth constrained by a widening supply demand gap.
Prime rents have held steady at about US$16.50 per square metre per month for Grade A offices and US$14.50 for Grade B space. More than 100,000 square metres of new Grade A stock expected by end-2025 is set to outpace current demand.
By contrast, Tanzania’s office market is showing resilient expansion. Occupancy has climbed to roughly 80% from 76% in H1 2025, signalling healthy absorption in the short to medium term.
The report, which tracks prime office performance across major African cities, finds that Grade A and ESG-compliant buildings are materially outperforming secondary stock, commanding rental premiums of between 30% and 40% in select markets, while sustaining higher occupancies and stronger investor appetite.
