A new Knight Frank report has revealed a growing shift in Nairobi’s commercial property market, with landlords increasingly changing how they invest in older buildings as investor priorities evolve.
According to the Knight Frank Kenya Wealth & Investment Trends Report 2026, environmental, social and governance (ESG) considerations are becoming a key factor in commercial property investment decisions, prompting landlords to modernize aging office buildings through energy-efficient improvements, renewable energy integration and upgraded amenities rather than replacing them with new developments.
Knight Frank found that 38 percent of respondents said their clients are targeting underperforming commercial properties for refurbishment while maintaining their existing use, reflecting growing demand for buildings that are more efficient, competitive and resilient over the long term.
“Commercial property is entering a new phase where value is increasingly created through thoughtful refurbishment. Investors recognize that improving the environmental performance of existing buildings not only extends their useful life but also enhances competitiveness in a market where occupiers are demanding higher quality space,” said Boniface Abudho, Research Analyst at Knight Frank Africa.
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Renewable Energy and Green Buildings Shape Investment Decisions
The report indicates that sustainability is no longer a secondary consideration for investors and instead, it is becoming central to how capital is allocated within the commercial property market.
According to the survey, 75 percent of respondents identified renewable energy integration as the most important ESG factor when assessing commercial property acquisitions.
Another 62.5 percent cited green and sustainable building certifications, while 43.75 per cent said a property’s impact on nature and biodiversity also influences investment decisions.
Energy efficiency ratings, electric vehicle charging points, amenities that improve occupier experience and a project’s wider community impact also featured among investors’ priorities.
The report further found that 44 percent of respondents said their clients primarily invest in high-quality sustainable or prime-grade assets.
A further 38 percent highlighted investments in renewable energy projects, carbon sequestration opportunities and selective land acquisitions as part of their ESG strategies.
Another 31 percent said investors are willing to dispose of poorly performing ESG assets, while 25 percent expressed interest in acquiring underperforming commercial properties with the intention of repositioning or repurposing them.
Knight Frank Report Shows Landlords Are Future-Proofing Older Buildings
Knight Frank Kenya Chief Executive Officer Mark Dunford said refurbishment has evolved beyond cosmetic improvements and is now focused on making buildings more competitive and cost-efficient.
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“Refurbishment is no longer simply about aesthetics. It is about reducing operating costs, improving energy efficiency and ensuring buildings remain attractive to tenants and investors in an increasingly competitive market.”
The report says owners of older commercial buildings have an opportunity to protect long-term asset values by investing in improved energy systems, smart building technologies and better occupier amenities.
Such upgrades not only enhance building performance but also help meet growing tenant demand for sustainable and efficient workspaces.
Dunford added that buildings capable of adapting to changing occupier expectations are likely to outperform those that fail to modernize.
“The buildings that perform best over the coming years will be those that adapt to changing occupier expectations. Investors who enhance existing assets today are positioning themselves for stronger performance tomorrow.”
Abudho said the trend demonstrates how Kenya’s commercial property market is evolving, with refurbishment enabling investors to generate commercial returns while extending the life of existing buildings rather than fundamentally changing their purpose.
The report found that environmental, social and governance (ESG) factors are increasingly influencing investment decisions, pointing to a growing focus on resilient, efficient and future-ready commercial real estate.
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