Private Equity firm Fusion Group has announced plans to build a Sh1.25 billion office block in the Upper Hill area of Nairobi.
“Fusion (Group) announces the syndication launch, for a new $14.7 million (Sh1.25 billion) commercial office development in the Upper Hill area of Nairobi, Kenya,” the PE firm in said a statement.
Fusion says that the project’s location in Upper Hill’s diplomatic belt is its main selling point.
“The proposed development, in a highly sought-after location near the British and Japanese Embassies, is attracting considerable interest from investors,” said the firm.
The announcement comes barely seven months after November last year’s Fusion-led consortium, which invested Sh1.4 billion in an office complex dubbed Upper Scale Developments on Ngong Avenue, Upper Hill. The development is scheduled for completion next year.
Nairobi is currently enjoying a huge demand for high quality office space, thanks to an influx of global corporation in the mining sector and others establishing regional offices in the city.
According to a recent report by Knight Frank, Nairobi was ranked top in a list of 16 cities across Africa, Asia and Middle East, that measured the rate of increase in office space rent.
In 2012, office space rent in Nairobi’s high-end areas rose by 17.9 per cent against the 5.1 per cent global average, said the Knight Frank report.
Thanks to the high returns, high-end office is attracting both local and international investors, who are building office blocks targeting multinationals.
Last week, the Business Daily reported that Reliance Industries, a company associated with India’s riches man Mukesh Ambani had acquired combined 27.5 acres in various high-end estates in Nairobi for commercial office development.
Reliance Industries has so far developed two properties in Nairobi; Delta Centre (Upper Hill) which was sold to the World Bank and Delta Towers (Westlands) which was sold to the University of Nairobi and PricewaterhouseCoopers.
