Why Nairobi's office vacancy problem is shrinking

Suleiman Shahbal, chairman of Gulf Group of Companies (second left), with Soren Investment Managing Director Aleem Khan, DAL Group Chairman Osama Daoud and Gulf Group Director Ahmed Bajaber during the groundbreaking of a Grade A office development in Lavington. [Courtesy]

Nairobi's office glut is shrinking after years of oversupply, driven by a steady shift by companies from ageing buildings into modern Grade A offices offering better amenities, lower operating costs and stronger environmental standards.

 That transition is reshaping the city's commercial property market, with premium developments recording stronger occupancy even as older office blocks continue to struggle with weak demand and prolonged vacancies.

 The Nairobi Metropolitan Area ended 2025 with an office oversupply of 3.4 million square feet, down from 5.7 million square feet a year earlier, while vacancy rates fell to 15.3 per cent from 19.3 per cent, according to Cytonn Research.

 The improved performance has nonetheless encouraged fresh investment, with the Gulf Group of Companies breaking ground on a Grade A office development in Lavington.

 The project will house Gulf African Bank, GulfCap Investment Bank and GulfCap Real Estate under one complex, consolidating the group's financial and investment operations into a single institutional base.

The development will comprise two six-storey office blocks built to international commercial standards, with the group positioning it as a long-term institutional investment rather than a speculative property venture in a still-oversupplied market.

 Construction comes as developers increasingly shift toward owner-occupied Grade A offices, a trend driven by caution in the broader market where older commercial buildings continue to struggle with weak demand and prolonged vacancies.

 "This development reflects our long-term confidence in Kenya's economy and Nairobi's position as a regional financial centre," said Gulf Group Chairman Suleiman Shahbal.

 "We are investing in infrastructure that supports institutional growth while creating a modern working environment that matches global standards," he added.