Rents for retail stores continue to drop as tough economic times persist

The finding has attributed the drop to an oversupply of retail space in certain locations and reduced consumer spending due to the current economic climate/FILE The finding has attributed the drop to an oversupply of retail space in certain locations and reduced consumer spending due to a slow down in the country’s economy.

According to the study, these factors have resulted in the retail sector remaining a tenants’ market, with landlords having to increasingly make concessions to compete with other retail centers for occupiers.

During the period under review, occupancy levels for retail averaged 77 percent, with the more established malls recording higher occupancy levels of over 90 percent.

Footfall for most retail centers in Nairobi decreased over the review period due to competition amongst the increased number of malls, reduced consumer spending power and growth of e-commerce.

Major developments in the pipeline include the 280,000 square feet Comesa Mall in Eastleigh and the 50,000 square feet Phase III of City Mall in Nyali.

There was also a notable decrease in the number of shopping center developments opening in Nairobi and its environs over the period.

Local and international supermarket chains continued to make strategic moves, expanding their local presence and establishing a stronger footing in the retail market. Recent developments in the retail sector

In July, South African retailer Game opened its third outlet at Kisumu’s Mega City Mall.

In August, local supermarket chain Tuskys opened a branch at Oasis Mall in Malindi, replacing Nakumatt as the anchor tenant.

The retailer also announced plans to partner with small local retailers in Kenya and Uganda by 2024 through franchising and consolidation so as to gain a greater market share. It currently has a pilot franchise ongoing in Buru Buru Estate.

Additionally, it has struck a deal with Vivo Energy to open express outlets within the Shell Petrol Stations. In the same month, South African retailer Shoprite Holdings borrowed Sh571 million from Stanbic Bank Kenya for its local expansion.The retailer opened two new stores: at Waterfront Shopping Centre in Karen and City Mall in Nyali.In September, Sokoni Retail Kenya became the majority stakeholder of Quickmart Supermarkets following the merger of Quickmart and Tumaini supermarkets. Tumaini supermarkets will, following its acquisition, now trade under the Quickmart brand name.The retailer opened its second 24-hour supermarket in Westlands in August and another branch in Ongata Rongai in November.Quickmart is expected to open another five stores in 2020, including its third 24-hour […]

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