OFFICE BUILDINGS AROUND NAIROBI
Office space around Nairobi CBD and its environs has become very scarce due to high demand.
Currently, Nairobi CBD is experiencing 99% occupancy rates.
CBD environs such as Westlands and Upper Hill are also experiencing the same 99% occupancy.
New buildings are coming up mainly in the Westlands region.
Along Woodvale grove in Westlands there are 5 new office buildings coming up.
Near State House, there is also a huge office building coming up.
Westlands is rapidly growing along the Waiyaki way.
Deloitte office block near Nairobi School is a good example of this. Safaricom offices pioneered in this move towards developing along Waiyaki way on the way to Kangemi.
Currently, we have several acres of land fronting Waiyaki way for sale suitable for office buildings.
See www.a4architect.com/landforsale for available land here.
Land in this area is slightly cheaper than land n Upper Hill. An acre in upper hill is going for KES 200,000,000 while an acre in Westlands is going for KES 150,000,000.
The rents are more or less the same for both areas at an average of KES 100 per square foot.
RETURN ON INVESTMENT
The current cost of construction for high-rise office buildings in Nairobi is KES 60,000 per square meter.
Assuming a land of 1 acre and 50% built up area, this totals to 20,000m2 floor area for 10 storeys.
The construction cost will therefore be KES 60,000 x 20,000m2 = 1.2 Billion.
Land cost will be KES 150,000,000[WESTLANDS] or KES 200,000,000[Upper Hill].
This totals to KES 1.35Billion for Westlands and KES 1.4 Billion for Upper Hill.
If the offices are for sale, the average price per square meter is KES 120,000. This totals to KES 120,000 x 20,000m2 =KES 2.4 Billion.
This is a 100% Return on Investment with profits in the tune of KES 1.2 Billion.
Since the overall cost is close to the same, most developers will therefore find Westlands a better deal since land is cheaper and more readily available than Upper Hill and the rental income is the same.
For the end-users, Upper Hill is a definite advantage due to its proximity to Nairobi CBD.
See www.a4architect.com/landforsale for land on sale in Upper Hill.
Francis Gichuhi Kamau