Britam Asset Managers have called attention to the fact that there is a glut in the shopping mall sector. The firm’s real estate tracker shows that there is an oversupply in all types of retail space in Nairobi and for big malls countrywide. The ongoing Two rivers project will be the cap as far as demand for retail space in Nairobi is concerned.
Kenneth Kaniu, speaking at the East Africa Property Investment Summit on Wednesday 6th April, said that areas like Naivasha, Kisumu, Nakuru, Nanyuki and Mombasa presented numerous opportunities for malls ranging from 1,000 to 10,000 square feet
In 2015, the Nairobi County government issued planning approvals for multi-unit, developer led industrial/warehouse developments at 280,00m² reaching a record level. The developments would span two years.
Cytonn Investment Management in its Nairobi commercial office market report said commercial office space in Nairobi could be headed for a glut after 5.4 million square feet of office space was completed in 2015 compared to 3.4 million square feet in 2014. In 2014, Managers and Mentor Management Limited (MML) predicted that by the end of 2016, there will be over 2.8 million square feet of office space, or 19 per cent of the total stock of new buildings delivered since 2009, lying vacant.
Meanwhile, the industrial market is set to be the premier investment front. MML chief executive James Hondell asserted that changes in the industrial market over the last 3 years indicate that over two-thirds of completions of industrial premises would be for sale and lease. The Industrial market in Nairobi takes in about Sh3billion a year in investments-exclusive of land costs- compared to Ksh20 billion that goes into commercial office sector.
MML reported that Embakasi in Nairobi currently tops in the supply of warehouses for lease or sale, with Industrial Area leading in owner-occupied warehouses. However, in 2015, warehouse take-up was as high in Kiambu County and Mavoko sub-county as in Nairobi, with land being cheaper in the city’s outer perimeters currently benefiting from improved accessibility to the airport as a result of new infrastructure