Renting an office space in Nairobi can take a pretty big toll on your time and money. Despite office space being in high supply, the costs and complications that come along with renting office space should not be underestimated.
The real estate market, however, has changed a lot in recent years, and there are now quite a few options out
there for savvy business owners wanting to make smart choices about their
office setup.
Here is a simple guide to your main options and what you
need to consider:
Traditional Commercial Lease
For a long time, traditional commercial leases have been the
go-to for a lot of businesses once they reach a certain point and need to house
a growing team.
There is a wide variety of commercial office buildings in
Nairobi in terms of quality. There are some high-quality buildings coming onto
the market lately. The good news is that the high-quality buildings are not
actually that much more expensive than the B-grand buildings – so its worth
trying to get a good deal in a more prime property that you know will remain
well-maintained over the duration of your lease.
The main down-sides of taking on a commercial lease is that
most Landlords will insist on a minimum of five years and three months –
shorter than this length will constitute a controlled tenancy, which Landlords will rarely agree to.
Though you can always ask – building owners with high vacancy and low demand
could be persuaded if you insist it’s non-negotiable.
The other major consideration when taking on a commercial
lease is the high costs of fitting out an office. Unfortunately, office spaces
in Nairobi rarely go on to the market as more than “shell and core” – meaning
you will literally have to cater for everything from the floor to the power
sockets.
An option would be to look for an office that was fitted out
by previous tenants, who are downsizing or moving to a new location. However,
as the cost of fitting out is so high, many don’t usually do this after their
initial lease period, and so often what you’ll find are fairly tired-looking
fittings. You can get lucky though – so again, as an agent such as Pam Golding to
help find one.
Unless your business is very secure and you’re confident
that will remain so over the next 5-6 years, or you have the excess capital to
tie up into fixtures and fittings, you may want to consider other options. If
you want to read more about negotiating a lease, we’ve provided a guide
here.
Residential House
Probably the more affordable option for office space for a
larger team would be a house converted into an office. What makes houses
affordable is not necessarily the rental – which can be higher than you might
think. It’s things like the lack of service charge and the price you’ll pay for
residential vs commercial internet connectivity. Though, there is a compromise
you will need to make on internet quality to residential properties – which is
notoriously less stable.
The House option might not suit companies that are looking
to attract customers who might be put-off by you not having a commercial space
– which is still deemed to be important for many local businesses. You may find
that you opt to have meetings in coffee shops rather than inviting people over
to your office.
Another consideration of the House office is security.
Unless you’re in a high-end compound, you will have to cater for the costs of
security guards. And on top of this also to weigh-up the general risk of being
in a standalone property that might be hard to secure.
Of course in a house, what you will miss is the connection
to other companies and your team may find themselves cut off from peers. This
could make it harder to attract and retain talent for your
business.
Serviced Office Space
An option that has been around for a few years already, and
has steadily grown in demand beyond international blue-chip companies, are
serviced offices. A serviced office means that you do not have to take a direct
lease with a landlord. Rather you will get a licence for space, which will give
your business much more flexibility. Many serviced offices will still ask for
two or three years – though some, including Nairobi Garage, offer yearly
contracts.
Serviced offices come in a range of prices. The more “corporate”
serviced offices in Nairobi can be very expensive. That might suit companies
looking to maintain a certain perception – but you’ll pay for it. Many of the
old-school serviced offices also fall short in terms of providing networking
opportunities – though on the upside, you will have a lot of privacy that
perhaps a coworking space might not be able to offer.
A key tip is to ensure you’re fully aware of any “hidden
extras” or exclusions to your serviced office contract. A major benefit of
a Serviced
Office is being able to easily fix your monthly costs for that period
– and so its important to ensure whatever price you are getting is
all-inclusive. If not, you may find costs escalating.
Coworking Space
Coworking spaces in Nairobi are growing in number and
diversity. Coworking means that you’ll be working alongside other teams in the
same space – often in an open-plan office design. This can be great when you’re
starting out – coworking spaces allow you to meet many people, who might go on
to become customers or suppliers.
The major benefit of coworking is that you can scale up and
down your office space from month to month – so you’re only ever paying for
exactly what you need. That level of flexibility and agility is unbeatable
among the other options discussed. Especially when you’re growing your team,
this can be super appealing.
For a growing number of established companies, the appeal of the coworking space set-up remains even as they grow. Once you’re used to working alongside other companies and you’ve built a strong network in your coworking space, it’s hard to imagine working alone.
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