Grade A offices and ESG-compliant buildings are showing strong investment potential
But Knight Frank warned that Gaborone's office supply is set to expand over the next 2-3 years, exerting downward pressure on prime rents
Premium, sustainable buildings in prime locations are commanding higher rents and attracting high-quality tenants, signaling strong demand in Botswana's office property market.
The most in-demand segments—Grade A offices and ESG-compliant buildings—are showing strong investment potential, according to insights from Knight Frank and Letlole La Rona.
Grade A office spaces have risen 11% while green buildings offer 30 to 40% premiums, according to a 2024/25 property report by Knight Frank which shows that Prime office yields currently range between 7.25-8%, sitting slightly below the continental (African) average of 9%. This positions Botswana as a competitive market for yield-seeking investors in the African context.
Rising Rents for Grade A Office Spaces
Rental growth – Knight Frank revealed that monthly rents for Grade A office spaces now range from P170 to P190 per square meter (US$12.22–13.66 psm).
Year-on-year increase – This marks an 11% rise compared to the second half of 2023, according to Knight Frank’s 2024/25 property report.
What Makes Grade A Offices Stand Out?
High-quality design – These buildings feature modern architecture and superior functionality.
Premium amenities – Many include gyms, showers, and cafes, enhancing the workplace experience.
Attracting top tenants – Knight Frank said high-end features make these spaces more desirable for businesses looking for premium office environments.
“This makes them particularly attractive to companies aiming to bolster their brand image and impress clients, partners, and stakeholders, whilst ensuring they are able to attract and retain the best talent,” the report said.
There are key considerations for this premium segment according to Letlole La Rona:
Strong demand for smaller, high-quality, easily subdivisible spaces
Current requirements from strong covenant tenants range between 2,000m² and 4,000m²
Existing stock falls short of expectations, particularly regarding parking and sustainability certifications
Rental rates strengthening in this segment
“There are several strong covenant tenants with known requirements in the market, for whom existing available stock will fall well short of their expectations, including sufficient parking provisions and sustainability accreditations,” Letlole La Rona said in its 2023 annual report.
“This has led to a strengthening of rentals in the premium portion of the market while secondary grade offices continue to suffer”.
Letlole La Rona said:
“In Botswana, the supply of good-quality space remains limited while an oversupply of secondary-grade stock continues to overhang the market.”
Geographical Trends
The market shows evolving geographical preferences:
CBD maintains its position as the primary location for major corporate headquarters
Letlole said Setlhoa in northern Gaborone is emerging as a competitive decentralised office node, positioned to rival the Showgrounds, benefiting from excellent amenities
There is a lack of available space large enough for big companies, and Letlole views that those with significant needs will have to agree to pre-leases.
Green-Certified Offices Command Rental Premiums
Higher rents – Green-certified office buildings attract rental premiums of 30–40% compared to conventional office spaces.
Why the premium? – Sustainability features like energy efficiency and improved indoor air quality add value and drive demand, Knight Frank said.
Growing ESG focus – Knight Frank believes the increasing prominence of Environmental, Social, and Governance (ESG) criteria is influencing tenant preferences, boosting interest in eco-friendly buildings.
Example: The Motswere Building in Botswana
Landmark development – The Motswere building, owned by Prime Time, is a notable example of a green-certified office space.
Prestigious certification – It earned Botswana’s first 5-star design Rating under the Green Star SA certification tool.
International recognition – The certification is acknowledged by the World Green Building Council, reinforcing its sustainability credentials.
Part of a Broader African Trend
Botswana follows a continental shift – Demand for Grade A and ESG-compliant offices mirrors trends in major African business hubs.
High occupancy rates – According to Knight Frank, cities such as Johannesburg, Cape Town, Nairobi, Cairo, and Lagos report Grade A office occupancies exceeding 70% after steady growth over the past two years.
Notable developments – Key examples include:
The Mirage Towers (Nairobi)
The Sandton City Office Towers (Johannesburg)
The Nile City Towers (Cairo)
The Landmark (Lagos)
Rising Rents in Key Markets
Price growth across Africa – Demand for eco-friendly, high-tech office spaces is driving rental prices higher.
Case study: Johannesburg – Prime rents for Grade A offices rose by over 15% year-on-year, reaching approximately US$15 per square meter monthly in 2024, up from US$13 in 2023, according to Knight Frank.
Botswana Outlook:
But investors should be aware that Knight Frank warned that Gaborone's office supply is set to expand over the next 2-3 years. The firm cautioned that this upcoming increase in available space could potentially exert downward pressure on prime rents and slightly raise vacancy rates from their current historic lows (leasing inquiries jumping 10% in the second half of 2024 compared to the same period last year).
According to Knight Frank:
The office vacancy rate in Gaborone remained low in H2 2024, ranging between 2% and 4%. The vacancies are concentrated in older office stock within the Kgale and Main Mall nodes, which have experienced a 3% decline in occupancy rates compared to H2 2023.
In contrast, newer, top-grade offices have maintained high occupancy rates ranging between 96% and 100%, driven by their modern amenities and adherence to sustainability standards.
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