SMEs spur growth of business centres

May 5, 2009
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, NAIROBI, Kenya, May 5 – The growing number of Small and Medium Enterprises (SMEs) has led to a demand for office space and meeting rooms in the city.

Consequently, property managers, building owners and other businessmen are fast cashing in by transforming any available space within city buildings into meeting rooms and offices for SMEs.

In addition, with traditional venues for meetings such as restaurants becoming inadequate, Evelyn Kago, the Chief Executive Officer at Quality Service Investments notes that hawk-eyed entrepreneurs are renting building spaces and transforming them into business centres.

“Days of briefcase operations are gone; this is the reason why most SMEs want to operate from an office,” explains George Ngeno, a freelance graphic designer.

Revlon Plaza, ViewPark and Hazina Towers are some of the city buildings where property managers have transformed some floors into business centers for SMEs to occupy. The same has also been replicated in areas such as Westlands and along Mombasa roads.

Elsewhere along Tom Mboya and Accra streets, owners of bed-and-breakfast lodges have transformed some floors into meeting rooms with some citing that the rooms are no longer lucrative. The negative perception associated with lodgings is also to blame.
 
Garden Square Restaurant – popular for wedding and funeral meetings – is ever a bee hive of activity especially in the evenings and weekends. The venue has been sub-divided to fit up to 25 different groups each of them having to pay Ksh1000 to secure the meeting venue.

According to Ms Kago whose company has rented office space at Reinsurance Plaza and transformed it into a business center, SMEs want a place they can easily access, that offers internet as well as security and other amenities such as washrooms.

Her premises offer 25 working stations which have been occupied by various SMEs and two common board rooms for the small enterprises to host meetings. There is also a meeting room which can accommodate 20 people, rented for Sh1,500 per sitting. Ms Kago says it is usually hired out by investment groups as well as other groups such as wedding and funeral committees.

Each SME pays KSh4,500 per month on rent inclusive of a workstation and Internet.
The SMEs also share the secretary cum receptionist, who will answer and transfer calls to the respective workstations.

However, Mr Ngeno notes that some business centers start off well but later their management becomes reluctant on issues such as security and poor internet speeds.  “Business centers should ensure that they stick to the initial standards at all times,” he adds.

The concept of business centers has been borrowed from business incubators, where start-up SMEs are provided with space, internet as well as training before they are let off on their own.

The Kenya Kountry Business Incubator Enterprises (KEKOBI) which until recently was located at the   National Bank House and SMEs Solutions Center (SSC) run by the International Finance Corporation are some of the examples of business incubators.

Other incubators are located at the Export Processing Zone, Kenya Industrial Research and Development Institute (KIRDI) and the Kenya Industrial Estates (KIE).

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