2025-02-13-莱坊-Africa_Office_Market_Dashboard_H2_2024_15页_13mb

Africa Offices Market Dashboard Summary - H2 2024

Core Content Overview

The Africa Offices Market Dashboard report provides an in-depth analysis of the prime office market across various African countries, highlighting rental performance, trends, and key drivers in H2 2024. It focuses on occupier preferences, market dynamics, and the impact of economic and environmental factors on the real estate sector.

Main Trends and Key Insights

1. Growing Demand for Grade A and ESG-Compliant Offices

• Grade A offices are increasingly sought after due to their modern, sustainable, and energy-efficient designs.
• These offices are particularly popular in strategic business hubs such as Johannesburg, Cape Town, Nairobi, Cairo, and Lagos.
• Grade A office occupancies in these cities have increased significantly, with some reaching over 70%.
• Rental prices for Grade A offices have risen, especially in Johannesburg, where prime rents increased by 15% YoY to US$15 psm.

2. Rise of Flexible and Shared Workspaces

• Flexible and shared workspaces are gaining traction, especially in response to the continent's growing working-age population (projected to increase by 450 million or 70% by 2035).
• KOFISI and Workshop17 are leading providers of flexible office spaces, managing over 22 locations and 60,000 sqm.
• The global coworking market is expanding, with 5 million people working from flexible spaces in 2024.

3. Impact of Currency Devaluation on Rental Markets

• Malawi and Nigeria have experienced currency devaluation, leading to inflationary pressures and rental increases.
• In Malawi, the Kwacha devaluation (44%) has resulted in rental premiums of 30–40% for green-certified offices.
• In Nigeria, the naira depreciation (53%) has caused rental escalation in Lagos, with rates effectively doubling in naira terms.

4. Regional Variations in Office Market Performance

• Botswana: Gaborone's Grade A office rents increased by 11% YoY to US$170–190 psm, with a 7.25–8% yield.
• Egypt: New Cairo has become a preferred location, with prime rents at US$37 psm and an 10.7% YoY increase.
• Kenya: Nairobi's Grade A rents are US$13 psm, with occupancy rates at ~80–100%. However, oversupply has led to a contraction in future developments.
• South Africa: Johannesburg and Cape Town maintain stable rents of US$12–15 psm, driven by high occupancy rates and ESG compliance.
• Tanzania: Kampala's Grade A rents are US$16.5 psm, while the Peninsula area has seen 13% rent increases due to improved accessibility.
• Zambia: Lusaka's office market has experienced a 20% increase in leasing activity, with prime rents at US$18 psm.
• Zimbabwe: Harare's CBD has seen a 10% YoY rent decrease, while suburban areas have experienced 20% rent increases due to infrastructure issues and high operational costs.

Key Drivers of Market Trends

• ESG Compliance: Sustainability and energy efficiency are becoming key differentiators in office markets.
• Demographic Growth: The expanding working-age population is increasing demand for office space.
• Currency Fluctuations: Devaluation has led to inflationary pressures and higher rental rates.
• Operational Efficiency: Improved infrastructure and accessibility are driving demand for modern office locations.
• Tenant Retention and Migration: Companies are relocating to areas with better governance and lifestyle amenities.

Future Outlook

• Supply Expansion: Several countries are expected to see new office developments in the coming years, which may affect rental affordability and vacancy rates.
• Suburban Shift: There is a growing trend of occupiers moving to suburban areas due to CBD challenges such as congestion, high costs, and infrastructure issues.
• Speculative Development: Developers are cautious due to economic uncertainty, rising costs, and rental affordability concerns.
• Green Building Initiatives: Developers are increasingly focusing on sustainable designs to meet occupier demands and global ESG standards.

Summary Table

Key Contacts

• Egypt: Zeinab Adel, Partner - Head of Egypt – zeinab.adel@me.knightfrank.com
• Kenya: Mark Dunford, CEO – mark.dunford@ke.knightfrank.com
• London: Ben Woodhams, Partner, Africa Desk – ben.woodhams@knightfrank.com
• Malawi: Desmond Namangale, Managing Director – desmond.namangale@mw.knightfrank.com
• Middle East and Africa: James Lewis, Managing Director – james.lewis@knightfrank.com
• Nigeria: Frank Okosun, Managing Director – frank.okosun@ng.knightfrank.com
• South Africa: Steve Rennie, Managing Director – steve.rennie@za.knightfrank.com
• Tanzania: Ahaad Meskiri, Managing Director – ahaad.meskiri@tz.knightfrank.com
• Uganda: Judy Rugasira Kyanda, Managing Director – judy.rugasira@ug.knightfrank.com
• Zambia: Tim Ware, Managing Director – tim.ware@zm.knightfrank.com
• Zimbabwe: Siza Masuku, Managing Director – siza.masuku@zw.knightfrank.com
• Research: Boniface Abudho, Africa Research Analyst – boniface.abudho@ke.knightfrank.com
• Research (MENA): Faisal Durrani, Partner - Head of Research – faisal.durrani@me.knightfrank.com

Recent Publications

• The Africa Report 2024/25
• Africa Offices Market Dashboard H1 2024
• Africa Industrial Dashboard H1 2024
• Africa Horizons 2023/24

Important Notice

• This report is for general information only and should not be relied upon for decision-making.
• Knight Frank LLP disclaims all liability for any loss or damage resulting from the use of this document.
• Reproduction is not permitted without prior written approval.