- Most prime retail destinations in Kenya, comprising primarily malls, had an occupancy rate of 90% in the second half of 2022
- Naivas, Quickmart, Chandarana, and Carrefour continued to expand with Naivas leading with seven stores during the period
- Malls that opened during the period are Broadwalk, a mixed-use development along Ojijo Road in Westlands, and Greenwood Mall in Meru, with both malls being anchored by Naivas
- Knight Frank, however, warned that the general performance and supply of malls in Kenya has declined, with the focus shifting to convenience centres closer to residential neighbourhoods
A new report shows that most prime retail destinations in Kenya, comprising primarily malls, had an occupancy rate of 90% in the second half of 2022.
In its Kenya Market Update report, Knight Frank found that prime retail properties attracted a rent of $5.00 per square foot per month.
At the same time, the report observed that supermarket chains in Kenya had contrasting fortunes, with Naivas, Quickmart, Chandarana, and Carrefour continuing to expand while Uchumi, Tuskys, Nakumatt, Shoprite, Game Stores, and Choppies shutting down either through bankruptcy or exiting the market.
Knight Frank said that the performance of supermarkets could be attributed to the low penetration of modern retail in Kenya. They further quoted a report by Boston Consulting Group (BCG) which noted that 77% of retail sales are made in traditional retailers (commonly known as duka).
“This depicts the existence of a large consumer base for supermarket chains to target as the number of middle-income earners continues to increase,” Knight Frank noted.
Over the review period, Carrefour opened 3 branches – Kilimani, Valley Arcade, and Nairobi CBD – to increase its total branches to 19. Meanwhile, Naivas opened 7 stores – Elgon View mall in Eldoret, Naivas Nairobi West,
Naivas Express Uthiru, Greenwood mall in Meru, and Naivas Foodmarket Ojijo at Broadwalk mall, Westlands – to take its total stores to 91 and strengthening its position as Kenya’s retail leader. Chandarana Foodplus, a family-owned retail chain, opened their latest stores at Azalea Square along General Mathenge in Westlands.
New malls in Kenya
Malls that opened during the period are Broadwalk, a mixed-use development along Ojijo Road in Westlands, and Greenwood Mall in Meru, with both malls being anchored by Naivas.
Kilele mall in Murang’a County that is anchored by a local upcoming supermarket chain Magunas Supermarkets was also opened.
Major upcoming malls include Business Bay Square in Eastleigh with Carrefour planned to anchor it and
Promenade Mall in Nyali, Mombasa.
Knight Frank, however, warned that the general performance and supply of malls in Kenya has declined, with the focus shifting to convenience centres closer to residential neighbourhoods.
Land prices in Nairobi remain static
In a related story, new data by HassConsult has shown that land prices in Nairobi suburbs remained static in the last quarter of 2022.
The land prices indices show that land in the areas grew by a marginal 0.2% during the period under review.
The performance of land prices in Nairobi over the last three months of 2022 is a result of the spillover effect from the previous quarter, when activity generally slowed down across the general economy.
HassConsult observed that some suburbs are benefiting from the ripple effect of Westlands’ increasing commercialisation.
Land prices in Nairobi subdued amid slowdown of Kenyan economy
Loresho was the best-performing suburb over the quarter, with prices increasing by 3.2% while Spring Valley topped annually with a 14.64% price appreciation.
Sakina Hassanali, Head of Development Consulting and Research at HassConsult said that the recent rise of Westlands as the city’s premium commercial and entertainment hub has drawn more interest to its surrounding suburbs, creating more value in these quiet neighbourhoods that provide quick access to Westlands working
zones as well as services for shopping and recreation.
“Investors with insufficient funds to afford Spring Valley at KSh 220 million per acre are absorbed by Loresho’s lower priced price of KSh 95.5 million per acre,” she continued.
Hassanali added that the trend presents a window of opportunity for prospective buyers who want to live close to a high-end commercial hub.