Will Kenya’s malls bubble survive?

Two Rivers complex in Ruaka PHOTO: STANDARD
Kenya has 19 shopping malls under construction and several others are undergoing renovations as the mall craze grips the country even as experts are wary about their sustainability.

Currently there are 53 malls and the number will increase to 72 when the 19 are finished.

A new research by Sagaci, a Nairobi-based market intelligence firm, says there are 383 shopping centres across the African continent. In the East Africa region, Kenya has the highest number of malls (53) followed by Uganda (16) and Tanzania (13.)

Tanzania and Uganda currently have six and three malls under construction. There are others which are being expanded.

SEE ALSO :Workers to block bid to privatise port terminal

The shopping mall craze has taken Nairobi by storm, upsetting the market even as concerns emerge on the viability of the new mall projects around the country.

There are also fears of an oversupply with shoppers abandoning the old malls in favour of new and trendier ones.

In the recent past, Nairobi has attracted malls such as Garden City, TRM, The Hub, and new ones are lined up.

The new ones are Two Rivers and Riviera Malls on Limuru Road, Capital Centre, Greenspan, T-Mall and Kiambu Mall.

INVESTMENT CAPITAL

SEE ALSO :Ruto: I will not let Raila split Jubilee over handshake

Knight Frank recently named Nairobi as one of the top five cities in sub-Saharan Africa with the largest shopping centre development outside of South Africa. The city is emerging as a development hotspot with around 470,000 square metres of shopping centre space in the pipeline.

Sagaci Research says in its latest Shopping Malls Across Africa report that 27 new malls were opened across the continent in 2015 compared with 28 malls in 2014, while the total retail surface increased to 6.4 million square metres, with 383 malls currently operational (excluding South Africa).

East and North Africa have the highest number of malls at 152 and 124 respectively.

“This continuous growth in the number of shopping centres across the African continent is driven by a steady rise in local consumption, by a lack of formal retail space, by an influx of investment capital and by a strong interest from international brands willing to capture opportunities in fast growing markets,” the firm says in a statement.

“While some markets, such as Kenya and Namibia are reaching saturation in terms of shopping centre surface per 1,000 middle-class households, the current density of shopping centres remains very low across the continent,” adds the firm.

SEE ALSO :Signs one is depressed and possibly suicidal

Top malls that have AAA ratings, according to Sagaci Research’s rating system, are all located in North Africa — three in Egypt and one in Morocco. They were all opened in the last one year.

The highest-rated newly opened malls are Playce Marcory (AA) in Abidjan, Ivory Coast; Mega Center (AA) in Windhoek, Namibia and Garden City (A) in Nairobi.

Other malls such as Cap Sud in Abidjan, Ivory Coast and Bagatelle Mall in Mauritius have improved their rankings since last year after renovations or extensions as well as the arrival of new tenants.

At least 204 new shopping centres are expected to open by 2020 across Africa (excluding South Africa), increasing the total surface by 75 per cent to 11.1 million square metres.

“These new malls will provide more stores, opening up opportunities for retail brands, especially in Morocco, Egypt, Ghana, Nigeria, Rwanda, Kenya, Angola, Zambia, Mozambique and Namibia where a large number of new malls are expected to open in the coming years,” says Sagaci.

SEE ALSO :Oliver Minishi’s magic wand on drama fete

The malls come at a time when recent slowdown of growth is having an impact on the number of projects in the pipeline.

For the latest news in entertainment check out Sde.co.ke and Pulser.co.ke , for everything sports visit Gameyetu.co.ke and ladies we have you covered on Evewoman

Kenyashopping mallsINVESTMENT CAPITAL