Centum Investment, the company that built the iconic Two Rivers Mall, will not undertake the development of any commercial property in the next five years, pointing to the fading allure of mall business. Instead, the company will focus on managing the Two Rivers Mall, the biggest in Eastern Africa, and two office blocks. Things are thick for mall owners, and they can only get worse in the wake of the Covid-19 pandemic, which has seen consumers shun crowded places like malls for fear of contracting the disease. Moreover, the mushrooming of malls in Nairobi has seen tenants push for lower rents as footfall decline following tough economic times that have left a dark cloud over many Kenyans. Most investors were lured into setting up malls by the gospel of an expanding middle class. Today, of the 10 biggest malls in sub-Saharan Africa, three are in Nairobi. Two Rivers Mall, Garden City Mall and The Hub are ranked second, third and fourth-largest malls respectively behind South Africa’s Mall of Africa, which is the largest in Africa. But the mall frenzy is dying, at least for Centum. Samuel Kariuki, Centum Real Estate’s managing director, said the group will instead focus on managing the Two Rivers Mall and two of its office towers. Speaking on Friday after the release of the firm’s annual results for the financial year ended March 2020, Kariuki said the group would now pursue a “four-pronged” strategy for its real estate portfolio that prioritised a “sales-led development”. The mall leasing level at Two Rivers, according to its management, currently stands at 81 per cent, which is an increase of 71 per cent as of the end of March last year. “In our five-year strategy, we’re not putting up any commercial space, only managing the Two Rivers,” said Kariuki. After a dazzling performance, Centum Investment might have realised towards the end of 2018 that of its myriad investments, the property might be its Achilles’ heel. The high-flying investment firm, majority-owned by tycoon Chris Kirubi, found the going tough that year owing to the changes in the property market. After putting up the grand Two Rivers Mall, things might have started to unravel for Centum. A year earlier, Centum warned its investors that it expected its profits for the financial year ending March 2018 to decline by at least 25 per cent, sending a chill down the spines of its […]
Why Kirubi firm is pressing pause on new property projects
