Investment Sector in Kenya looks up as Java House announces expansion plans

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  • Java House Africa Group has announced that it was seeking franchisees under its Kukito Brand, which primarily serves grilled chicken and fries, to accelerate its growth in Kenya
  • The restaurant chain is looking to partner with local investors for an undisclosed amount who will use the Kukito brand name to establish more fast-food outlets across the country
  • The Group announced plans to open 30 new Kukito outlets in various parts of Nairobi in July 2021, reflecting the Group’s proactive expansion strategies

International restaurant chain Java House Africa Group has announced that it was seeking franchisees under its Kukito Brand, which primarily serves grilled chicken and fries, to accelerate its growth in Kenya.

The restaurant chain is looking to partner with local investors for an undisclosed amount who will use the Kukito brand name to establish more fast-food outlets across the country.

This comes after the Group announced plans to open 30 new Kukito outlets in various parts of Nairobi in July 2021, reflecting the Group’s proactive expansion strategies.

Currently, Java operates a total of seven Kukito outlets in the country, six in Nairobi County and one in Machakos County.

According to an analysis by Cytonn Investments, the partnership decision by the restaurant chain is mainly driven by several factors, including its need to step up competition from its close rivals, such as Kentucky’s Finest Chicken (KFC), and Subway restaurant among others.

It is also mainly driven by the need to foster growth and popularity in the retail market through expansion.

The positive demographics, such as the rising middle-income earning class with a higher purchasing power, are also a contributing factor, as well as increasing investor confidence in the Kenyan retail market that is evidenced by the aggressive expansion by international retailers as a result of Nairobi’s recognition as a regional hub.

Some of the retailers include Simbisa brands, Eat’N’Go Limited, and ChicKing, among many others.

According to Cytonn, Kenya remains a good investment opportunity for retail businesses despite the uncertainties posed by the resurgence of the pandemic, the heated political environment, as well as the increased cost of living.

“We expect the move by Java House Africa Group to accelerate growth in the retail sector in terms of rental yield and occupancy given the existing oversupply of retail space in some of the regions such as Nairobi.”

Java House announces expansion plans in Kenya.

According to the finding, Nairobi recorded an average rental yield of 7.8 per cent in 2022, 1 per cent point higher than the market average of 6.8 per cent, mainly driven by the higher rental rates that the retail spaces fetch at KSh 173 per SQFT, compared to the market average of KSh 122 per SQFT.

Java to increase its footprint in East Africa in a $10 million expansion plan

Four years ago, Java House said it was planning a $10 million expansion plan to increase its footprint in Africa.

At the time, the chain eatery said it had recorded a series of successes in its operations in East Africa and had planned to venture into new markets.

Since opening its first outlet in 1999, the company has been establishing multiple outlets regionally. The ease of doing business in the sub-Saharan region has accelerated its operations and stiffened competition for its rivals.

The firm has set aside close to $10 million for the expansion plan. The finances will go to setting up new branches and improving the company’s system.

The pre-eminence of the IT sector has been a vital component considering the technology era of business. Modern technology has transformed the way of doing business to serve the market effectively. The tech culture has been a game changer for various economic sectors.

Java House Group hinted at plans to expand in the West African market but will need to carry out market research to gather information on the new business environment. Nigeria had been on the company’s radar and should have and should harbour a store in a year or two. South Africa is also an after-sought market for the eatery.

More choice for Kenyans as Java opens another branch

Faqs

Who owns Java House?

Java House Group was established in Nairobi in 1999 by founder Kevin Ashley. In 2012, ECP acquired a majority stake in the company with Kevin Ashley retaining a minority stake.

Who owns Kukito?

Java House Group brands are; Java House, 360 Degrees Artisan Pizza, Planet Yogurt and Kukito

How many branches does Java house own?

Fast forward 21 years and Java House is East Africa’s leading coffee and food chain, consisting of more than 80 branches across four F&B businesses.

Wanjiku Njuguna is a Kenyan-based business reporter with experience of more than eight years.

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