Leasing commercial property in Kenya: offices, shops and warehouses

A commercial lease is usually a bigger commitment than a residential tenancy: longer terms, larger deposits and fit-out costs you cannot take with you. Here is what to check before you sign for an office, shop or warehouse.

1. Is the property allowed to be used for your business?

Confirm the zoning and approved use with the county. A house converted to offices, or a godown used for food processing, may need change-of-user approval and specific licences (for example from public health or NEMA). Without them your business licence can be refused.

2. Lease length and registration

Commercial leases commonly run for several years, often with an option to renew. In Kenya, leases above certain durations should be registered at the land registry to be fully enforceable against third parties, such as a new owner or the landlord's bank. Ask your advocate whether your lease should be registered and who pays stamp duty on it.

3. Rent and rent reviews

• Base rent per square foot or per month, and whether it includes VAT.
• Escalation: a fixed annual increase or a review mechanism.
• Rent-free period for fit-out, which is often negotiable.

4. Service charge and outgoings

In malls and office parks, service charge covers security, cleaning, common-area power and maintenance. Ask for the current budget and last year's actual costs. Clarify who pays land rates, insurance and repairs to the structure.

5. Deposit and guarantees

Deposits are commonly a few months' rent. Landlords may also ask for a bank guarantee or a director's personal guarantee. Agree how and when the deposit is refunded.

6. Fit-out and reinstatement

Agree in writing what you may change, who approves your fit-out plans, who owns improvements at the end, and whether you must restore the space to its original condition when you leave.

7. Exit terms

Look for a break clause, the right to assign or sublet, and what happens if the landlord sells or the building is damaged.

Checklist before signing

• Inspect power capacity, backup generator, internet options and parking.
• Confirm loading access and floor loading for warehouses.
• Check the landlord owns the property: do an official search.
• Have an advocate review the lease and negotiate key terms.

Frequently asked questions

How long is a typical commercial lease in Kenya?

Terms vary, but multi-year leases with renewal options are common, especially for offices and retail.

Who pays service charge in a commercial lease?

The tenant usually pays its share of service charge in addition to rent, in proportion to the space it occupies.

Does a commercial lease need to be registered in Kenya?

Leases above a certain duration should generally be registered to protect the tenant against third parties. Your advocate will advise for your lease term.