Nairobi is the best performing market over the past three years in the prime industrial sector across Africa, recording the highest increase in rents, at 28%, between 2018 and 2021. This is according to the latest Knight Frank Africa Industrial and Logistics Report.

The increase has been attributed to higher demand for good quality, large, modern facilities remains good with prime warehousing recording absorption rates of up to 80% in H1 2021. This demand continues to be fueled by the agriculture, ecommerce and FMCG sectors as well as the record infrastructure developments witnessed across the country.

The Kenyan Capital city also recorded significant growth in warehousing development with purpose built warehousing developers delivering over 170,000 sqm of prime warehousing over the last 5 years. There is a further 400,000 sqm expected to come onto the market by 2024.

Overall, East African cities have remained top performers with both Nairobi and Kampala recording prime rents at Ksh. 666 (USD 6) per sqm while Dar Es Salaam recorded at prime rents at Ksh. 770 (USD 7) per sqm.

Kinshasa and Dakar rank as the most expensive cities for prime warehouses in Africa, while Blantyre Ksh. 277.75 (USD 2.50 per sqm) is the cheapest. Luanda, on the other hand, experienced the most substantial fall in average warehouse lease rates, which currently stand at Ksh. 611.05 (USD 5.50) per sqm, down from Ksh. 1,111 (USD 10) per sqm at the end of 2018.

Anthony Havelock, Head of Occupier Services and Commercial Agency, Knight Frank Kenya said, ‘”As a key regional hub, Nairobi’s position in driving East African trade cannot be underestimated. With key infrastructure projects being delivered, we anticipate demand for best in class warehousing will continue to grow as this sector continues to mature. Although the new projects were initially slow to lease we have seen the sector gain momentum and the best developments are being occupied indicating the emergence of a distinct two-tier market.”