At about Sh551.8 million ($5.518 milion) per acre, Upper Hill is the most expensive addresses in the city despite its land prices falling by 1.2 percent in the last three months of last year, according to the HassConsult land price index for 2018.
Clearly envying Upper Hill and trying to steal its thunder is Westlands where thanks to a network of new roads saw an acre rise by 1.5 percent in the same period to stand at about Sh417.5 million ($4.175 million).
“Westlands is going through some sort of urban regeneration, hence we have seen a lot of interest in that area especially with the new infrastructure development and entertainment services going on,” says the HassConsult report.
The HassConsult report which was released last week says commercial office developers are getting increasingly attracted by new infrastructure development in the Westlands area at the expense of Upper Hill.
Access to Westlands is improving by the day thanks to new road works, such as the ongoing development of Waiyaki Way, the Waiyaki Way-Redhill link road and Ring Road-Parklands (Waiyaki Way to Limuru Road) connection.
Prime office space is also letting at a higher rate per square foot in Westlands compared to Upper Hill, according to real estate management firm Knight Frank.
Given that land is cheaper in Westlands, a developer stands to earn more for a building in the area than in Upper Hill.
The average rent for Grade A office space in Westlands is $1.4 (Sh141) a square foot per month compared to Upper Hill where the same fetches $1 (Sh101) exclusive of service charge and VAT, according to Knight Frank.
The office market is also becoming saturated in Upper Hill after years of intense office space development in the area, the HassConsult survey states.
“Upper Hill has seen a lot of commercial building lately, which has resulted in oversupply of space, meaning that anyone who is looking to develop office space in the area is seeing some difficulty doing that.
"When there is less demand to put up space there, then the price of land will take a slight hit,” said Sakina Hassanali, the HassConsult head of development, consulting and research.
The Gigiri area, popular with diplomatic missions and international organisations, has also seen rising demand for prime space, jerking up the price of land by 3.4 percent in the fourth quarter of 2018, and 10.6 per cent for the whole of last year, to Sh249.6 million per acre.
