Nairobi prime industrial market outperforms in Africa

The city also recorded stellar growth in development infrastructure with purpose built warehousing developers delivering over 170,000 sqm of speculative prime warehousing over the last five years with a further 400,000 sqm expected to come onto the market by 2024.

As a result of increased demand, land values in established industrial nodes across the city have grown by 42% in the five years to 2021. In addition, infrastructure developments such as the Chinese-built ring-road network in Nairobi are prompting some occupiers to explore areas beyond traditional industrial hotspots. As a result, these areas in the periphery of the city have seen industrial land values appreciate by as much as 34% during the same period.

Demand remains high for large, good quality, modern facilities with prime warehousing recording absorption rates of approximately 80%.

Coupled with attractive yields, anecdotal evidence suggests that investor interest in the sector is steadily growing. This has been demonstrated by key transactions such as GRIT’s landmark sale and leaseback deal with Orbit Africa earlier on in the year.

Anthony Havelock, head of occupier services and commercial agency, Knight Frank Kenya, said: ” As a key regional hub, Nairobi’s position in driving East African trade cannot be underestimated. With key infrastructure projects being delivered, we anticipate demand for best in class warehousing will continue to grow as this sector continues to mature. Although the new projects were initially slow to lease, we have seen the sector gain momentum indicating the emergence of a distinct two-tier market.”

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For further information, please contact: Tilda.mwai@me.knightfrank.com