Will Nextgen Mall raise demand for Mombasa Road office space?

NAIROBI, KENYA: Last month’s opening of Nextgen Mall just a few metres from the Southern Bypass is expected to raise demand for office space on Mombasa Road, which has over the years seen slow uptake. Since its opening in late December, there has been a speedy uptake of office space in the mall, with Nakumatt Supermarket leading as the anchor tenant.

Other companies that have set up shop at the 700,000-square feet mall located opposite Eka Hotel include the Kenya Commercial Bank and Amaco Insurance.

The launch of Nextgen Petro Centre at the mall is intended to attract global oil companies in Kenya to Mombasa Road. The centre, developed by the Nextgen Offfice Suites Developers Ltd, is part of an integrated development that also has a mall and a park consisting of three ten-storey residential towers.

The centre targets global petroleum companies trading in LPG, lubricants, fuel, petrol station equipment suppliers, polymer and other related trading activities in the country.

“The Petro Centre ensures that both national and international companies from this integrated infrastructure, all under one roof in terms of combined resources and streamlined processes and for better interactions within the industry and in the best interests of the Comesa region,” the developers said in a statement.

Alex Muema, managing director of Ndatani Enterprises, a real estate company, relocated from Afya Centre in Nairobi’s city centre and has set up shop in Nextgen Mall.

“We bought the office space in 2011. I have been paying progressively until last year November. I have  relocated from town due to congestion and traffic jam. The mall is also at an ideal location for me because most of my business operations are on the outskirts of the city,” says Muema.

According to Anthony Wanjiru of Revaloth Properties, who are selling Nextgen Mall offices, Mombasa Road office uptake is on the rise, propelled by cargo and tour firms.

“Many of those who live in Syokimau and Kitengela are setting up offices in buildings on the highway and avoid the CBD,” says Wanjiru, noting that most of them rent warehouses in the godowns.

Wanjiru says on the ground floor of Nextgen Mall, for instance, they charge Sh350 per square foot and Sh150 from the third to sixth floors. The mall is usually busy in evening hours, thanks to Lang’ata and Rongai residents who do shopping at the mall on their way home through the Southern Bypass.

But some think otherwise. “I don’t see much demand for office space on Mombasa Road even with coming of Nextgen Mall considering already we have an oversupply of 3.6 million square feet of office space in Nairobi and its nodes like Upper Hill and Westlands,” says Johnson Denge, the real estate services manager at Cytonn Investments.

Denge says historically, Mombasa Road has not been good for office space since it was originally an industrial zone.