Traffic jams push Dar es Salaam firms ‘out’

Dar traffic jam at Kariakoo

Traffic jams in Dar es Salaam's Central Business District (CBD) are forcing wealthy commercial companies to relocate to the periphery of the commercial capital as prices for office space escalate.

Knight Frank Managing Director, Ahaad Meskiri and Gimco Africa Limited Managing Director, Sultan Mundeme told the 'Daily News' that big companies are relocating to the periphery of the CBD to escape overhead costs caused by traffic jams, parking fees and rising office space prices.

"With the growing traffic problem in Dar es Salaam, some companies and institutions that do not depend on walk-in clients seem to be moving out of the CBD," said Ms Meskiri.

She pointed out that as a result prices of office space in the outskirts of the city such as Oysterbay is appreciating and almost rivaling that of the CBD.

"In places like Oysterbay, prices have gone up to 20 US dollars per square metre compared to the CBD which is charging between 18 and 21 US dollars," Ms Meskiri said.

Big companies which have relocated include Sumaria Group, Heritage Insurance Company Limited which have moved to Oysterbay; Tanzania Communications Regulatory Authority, Airtel Tanzania Limited, Tigo Tanzania Limited, Vodacom Tanzania Limited and Stanbic Bank Tanzania Limited which have relocated to Mikocheni, Mwenge and Kinondoni.

"This trend is further enhanced by the continuing redevelopment (upon obtaining approval of change of use) of traditional single occupancy residential housing developments into office blocks notably in the Peninsula and along Old and New Bagamoyo roads," she noted.

Seconding Meskiri's arguments, Mr Mundeme noted that despite rapid development of office blocks in the CBD, demand has meant that prices have only reduced slightly with long term prospects pointing to continued demand.

"In the past decade we have seen an increase in grade A office space buildings which has reduced prices from 25 to 30 US dollars per square metres to between 18 and 21 US dollars," Mundeme said.

Mundeme noted that despite the fact that big companies are relocating from the CBD, prices of office space remains high due to growing number of walk-in clients’ related firms such as banks, insurance companies and law firms.

Prices of office space in the outskirts of the commercial capital except Oysterbay remain low at between 14 and 18 US dollars but experts forecast prices to rise in the near future as more big businesses relocate to the periphery to seek more space and escape traffic jams.

Source: The Daily News,http://www.dailynews.co.tz, reported by Finnigani wa Simbeye

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