Nairobi Hub Shifts

Upper Hill in Nairobi, Kenya, is undergoing a significant transformation, shifting its focus from commercial to residential development. This change is driven by the area's high land prices, with an acre costing KES 568 million, according to HassConsult's Land Price Index. The growing demand for housing, fueled by the area's commercial core and traffic congestion, has made residential development a more attractive option for developers.

The area has seen a decline in office glut, with the oversupply of office space in the Nairobi Metropolitan Area decreasing from 5.7 million square feet to 3.4 million square feet between 2024 and 2025, according to Cytonn Research. However, commercial floorspace is no longer a guaranteed investment, with another 2.5 million square feet of office space expected to be added between 2027 and 2028. This has led developers to explore alternative options, such as residential development.

Despite the decline in office glut, Upper Hill still has one of the largest concentrations of commercial floor space in Nairobi, but it lacks modern residential stock. HassConsult has reported softening apartment prices and rents in Upper Hill, driven largely by ageing stock. In contrast, the land price in Westlands, another Nairobi suburb, is KES 508 million per acre, according to HassConsult's Land Price Index.

## Why it matters The shift towards residential development in Upper Hill is significant, as it addresses the growing demand for housing in the area. The high cost of land and the lack of modern residential stock have made it difficult for people to find affordable housing options. By developing residential properties, developers can provide a more affordable and convenient alternative for people who work in the area. This, in turn, can help reduce traffic congestion and improve the overall quality of life for residents.

The growth of residential demand in Upper Hill is also driven by the area's commercial core. Many people who work in the area have to commute from other parts of the city, which can be time-consuming and expensive. By providing residential options, developers can help reduce the need for lengthy commutes and make the area more attractive to potential residents. As Knight Frank expects prime office occupancy to continue rising in Westlands and Upper Hill through 2026, the demand for residential properties is likely to increase, making this shift a timely and necessary one.