- In 2020, life as we knew it came to a sudden halt.
- In 2021, vacancy rates in Nairobi’s office market skyrocketed to 26%, compared to just 10% in 2018.
- The commercial real estate sector in Kenya is at a crossroads. While the challenges are daunting, they also offer a chance to reimagine what these spaces can be.
In 2020, life as we knew it came to a sudden halt. The Covid-19 pandemic swept across the globe, disrupting routines, businesses, and industries. Days turned into months of uncertainty, and even as the world began to recover, the ripple effects of the pandemic didn’t simply vanish. Among the hardest-hit sectors was commercial real estate, a cornerstone of Kenya’s urban development.
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Table of Contents
The Rise of Remote Work
Let’s rewind five years. Back then, most people worked in traditional offices. The idea of working remotely? It seemed like a far-fetched dream or something reserved for freelancers. For the average employee in Kenya, work meant battling Nairobi’s infamous traffic, clocking into an office, and spending the day on a desk.
During this time, the commercial real estate sector was booming. Office buildings were sprouting up at an impressive pace. Nairobi’s city centre alone added over 7.5 million square feet of office space between 2015 and 2020, according to a report by Knight Frank. Business districts like Upper Hill, Westlands, and Kilimani became hubs of construction activity, symbolising a thriving economy.
But then came the pandemic, completely flipping the script and throwing everything off balance. Lockdowns were enforced and this forced businesses to experiment with remote work, and guess what? It worked! Employees proved they could be just as productive, sometimes even more so, from the comfort of their homes. Fast forward to today, and remote work is no longer an emergency solution; it’s the norm for many organisations.
This shift has taken a significant toll on demand for office spaces. In 2021, vacancy rates in Nairobi’s office market skyrocketed to 26%, compared to just 10% in 2018. Older office buildings have been hit the hardest, struggling to attract tenants due to their lack of modern amenities like high-speed internet, flexible layouts, and green certifications. Even newer offices have also struggled to attract tenants as many companies have fully transitioned to working remotely in a bid to save on costs.
Challenges Beyond Remote Work
The drop in office demand is just one piece of the puzzle. Several other challenges have emerged, creating a tough environment for commercial real estate in Kenya:
Economic Pressures
The pandemic left many businesses struggling financially, and some have been forced to downsize or shut down altogether. With fewer tenants, property owners are feeling the pinch.
The Rise of Mixed-Use Developments
Traditional office buildings are becoming less popular as mixed-use developments take over. These new spaces combine homes, shops, and offices, giving modern tenants a convenient all-in-one experience.

Shifting Tenant Preferences
Today’s tenants want more than just a basic office. They’re looking for energy-efficient buildings, spaces for teamwork, and designs that prioritise health and well-being. Developers who can’t keep up are struggling to stay competitive.
The Road Ahead
So, what does the future hold for commercial real estate in Kenya? While the challenges are significant, they also present an opportunity for innovation. Here are some ways the sector could adapt:
- Repurposing Office Spaces: Older, underutilised office buildings could be transformed into co-working spaces, residential apartments, or even vertical farms.
- Embracing Sustainability: Green building practices are not just a trend, they’re becoming a necessity. Developers who prioritise eco-friendly designs are likely to attract more tenants.
- Leveraging Technology: From smart building systems to virtual property tours, technology can help create more attractive and efficient spaces.
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Conclusion
The commercial real estate sector in Kenya is at a crossroads. While the challenges are daunting, they also offer a chance to reimagine what these spaces can be. With creativity and adaptability, the sector can bounce back stronger than ever, shaping a future where spaces are designed not just for work but for a better way of life.