Developers are modernizing establishments to cash in on giant retail stores preferring to move closer to consumers within estates, real estate consultancy firm has said in its half-year report, with the sector expected to add 225,000 sqft of retail space this year.
- The retail sector has seen fervent competition over the past few years, with Quickmart extending its reach to Narok with the opening of a new outlet, bringing its total store count to 60.
- Naivas expanded its presence along Thika Road, Mwanzi Market, Lang’ata Road, and Buruburu, solidifying its position with 104 stores nationwide while South African retailer Panda Mart entered the Kenyan market, renting 90,000 sq ft at Garden City Mall.
- Traditionally, retailers primarily focused their outlets within well-established malls which are predominantly situated in affluent neighbourhoods, away from the chaos of central business districts, but still far from residential areas of their target consumers.
However, historical oversupply of regional malls and evolving consumer spending behaviours, marked by a preference for convenience, have compelled retailers to establish their presence closer to their consumers – focusing on expansions away from malls and channelling their efforts towards increased satisfaction of their customers.
This shift, coupled with reduced disposable incomes and the surge in e-commerce, is prompting retailers to recalibrate their customer outreach strategies, focusing on strategic proximity to residential areas.
“Developers capitalised by expanding and modernising their establishments to meet the evolving retail consumer patterns. In Nairobi, monthly rents for prime retail space range from KES 600 per psft to KES 700 psft. Rent increases are attributed to higher demand for strategically located shops in higher income prime retail developments, with prime malls continuing to register occupancy rates exceeding 75 per cent,” Knight Frank says.
In the first half of 2024, China Square opened its third outlet along Langata Road. Additionally, furniture and homeware seller, Love Home Mart opened at Rosslyn Riviera.
The review period also witnessed the completion of Mwanzi Market and GTC Mall, both located in Westlands. The supply of retail centres in Nairobi remains steady with notable ongoing projects including Community Mall and Lavington Square.
