Nairobi leads shopping centre development in Sub-Saharan Africa

According to a recent report by Knight Frank, Nairobi stands out as a major focus for shopping centre development. It is ranked as the largest market by existing shopping centre floor space and it has the biggest development pipeline in the Sub-Saharan Africa region.

Shopping centres have been a feature of Nairobi since the 1980s when the Sarit Centre, regarded as the city’s first formal mall, opened. Over the following decades, Nairobi’s retail landscape has been populated by other successful schemes such as Yaya Centre, Village Market and The Junction. However, the current wave of development is creating modern malls that are setting new standards for size and quality within the market.

The most prominent shopping centre opening in 2015 was the first phase of Garden City Mall, others coming online include Centum’s 62,000 sqm Two Rivers mall, which is expected to open in 2016. Another key project set to open in 2016 is The Hub in Karen which lies in one of Nairobi’s wealthiest neighbourhoods, and will offer 30,000 sqm of retail space.

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The Kenyan retail market is dominated by local operators, despite growing interest from international chains. The market leader is Nakumatt, which has more than 20 supermarkets in Nairobi, while other major players include Tuskys, Naivas and Uchumi. Largely due to the strength of the local competition, South African chains have been relatively slow to enter the Kenyan market in comparison with some other Sub-Saharan countries. However, Game, operated by South Africa’s Massmart, made its Kenyan debut in 2015 as one of the anchor stores at Garden City Mall.

International retailers from outside of Africa who are taking a growing interest in Kenya include the French supermarket chain Carrefour, which will be an anchor tenant at both Two Rivers and The Hub. The Turkish fashion retailer LC Waikiki will also be entering the Kenyan market by opening a store at Two Rivers.

Knight Frank notes that other international retailers are considering entering Kenya but the difficulty of sourcing appropriate local partners is regularly cited as a major obstacle to market entry. There are only a small number of local firms with the expertise to partner with international retailers, with the most prominent being Deacons, which operates brands such as Adidas, Mr Price and Bossini in Kenya.

Knight Frank Research