30 Sep 2009 - Dar Es Salaam Offices

Here is an example property snapshot for this quarter:

DAR ES SALAAM OFFICE TREAL ESTATE SNAPSHOT FOR Q3 2009

CONTEXT

Whilst Dar Es Salaam is not the 'official' capital of Tanzania, it is the economic capital and, like many rapidly developing African cities, is undergoing great change in all its property sectors. This is in terms of location, design, availability and pricing.

Rents and capital values have traditionally been extremely high, significantly greater than either Nairobi or Kampala, the other main East African capital cities and a substantial readjustment is taking place.

The city suffers from a congested and somewhat dilapidated Central Business District (CBD). While the CBD still retains the majority of businesses and commerce, the tendency for new development in recent years has been to relocate outside the immediate city centre.

The prime office location has moved from the centre of the CBD to the Gardens Area, into what is loosely often known as the "golden triangle". This is defined as Ohio Street up to the junction with Bibi Titi Mohammed, and Samora Avenue out to the Ocean Road Cancer Hospital. While this is still central within Dar Es Salaam and adjacent to the CBD it has a different 'feel' to it and is the preferred location for the majority of international companies and also the Diplomatic missions. This area also includes the main business hotels, the golf course and the botanical gardens. Since 1994, virtually all new office development has taken place in this area.

This trend cannot continue indefinitely as a result of the limited space in this part of the city, but the increased pressure is unlikely to lead to a redevelopment of the old CBD, rather a move north of Salendar Bridge towards the prime residential area.

SUPPLY

There is a lot of new development just off the Gardens Area on Ohio Street which is due for completion during the course of next year and in 2011. There are also new developments along Ali Hassan Mwinyi Road which are also due to be completed at the same time as the ones in the Gardens Area

There has been and continues to be a trend for offices to be delivered on a "semi-finished and core" basis.

In summary we would characterise the supply of good quality offices in Dar Es Salaam as HIGH.

DEMAND

There is reasonable demand for quality office space in Dar Es Salaam. This is especially the case in the Gardens Area and on Ali Hassan Mwinyi Road leading up to New Bagamoyo Road. There is hardly any space to let within the Gardens Area.

Corporates entering the Tanzanian market for the first time tend to shun the CBD and opt instead for the open environment and less congested roads of the Gardens Area.

In summary we would characterise current demand for offices as GOOD.

RENTS

Prime office rents in Dar Es Salaam Gardens Area are now in the order of $18-20 /sq m /month.

 

This report is for information only and cannot be relied upon in coming to any investment or other commercial decision. EMC Real Estate does not provide a warranty as to the accuracy of this information and disclaims any liability for any errors and omissions.

Reproduction of the contents of this publication including any maps and photographs is strictly prohibited without first getting the permission of EMC Real Estate.