AFRICA

Occupiers set to remain in driving seat even as prime office rents stabilize across Africa

Like most other regions around the world, African cities have seen diminished office demand, which has been exacerbated by the economic fallout as a result of the pandemic.
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Categories: Property Sector Offices service Occupier Topic Economics World Regions Africa Botswana Kenya Malawi Nigeria South Africa Tanzania Uganda Zambia

Further, throughout Q1 2021, each market continued to be impacted by unique factors beyond the pandemic such as currency fluctuations in South Africa, the political climate in Lusaka and a supply glut in Johannesburg and Cape Town.

However, encouragingly enough the number of live enquiries and requirements in most markets increased towards the end of the quarter as business confidence returned.


Key points from the dashboard:

  • Prime office rents remained stable during Q1 2021 compared to Q4 2020. However, there was a huge disparity on rents within markets in the region. For instance, Lagos recorded the highest rents in the region at US$62.5 psm while Harare recorded the lowest rents at US$ 7 psm.
  • The prime office market in most locations was tenant favourable. This was attributed to the direct impact of the pandemic, with majority of landlords still offering lease concessions and rent discounts in a bid to attract and retain tenants. Beyond the pandemic, oversupplied markets such as Johannesburg also resulted in the sector being a tenant’s market.
  • Overall, occupiers were leaning towards occupational strategies geared towards flexibility and sustainability. Flight to quality and sustainability were key trends observed in the market during the period under review as occupiers sought to consolidate their existing operations and leverage on the market conditions for quality space.
  • Outlook - Varying approaches by the region’s governments to recurring infection flare-ups means the economic outlook is likely to remain mixed, leaving the office market in most locations tenant. However, upcoming infrastructure projects in the region such as the recent signing of the East African Crude Oil pipeline project in Uganda are expected to boost occupiers’ office demand.

Find out more in our Africa Offices Dashboard Q1 2021.

Photo by Zoe Reeve on Unsplash