Last year, the Gross County Product report ranked Nakuru the second-richest county after Nairobi.
The report released early in the year found that in 2017, the total value of goods and services produced in Nakuru was Sh517.4 billion, or 6.9 per cent of the national gross domestic product (GDP).
And in 2017, when the Cabinet approved the elevation of two towns to cities, Nakuru, alongside Eldoret, got onto the list that would take the country’s cities to five.
All this is good news, but amid the optimism, commercial property developers are struggling with a low uptake of the spaces available to let.
Take Tower One, one of Nakuru’s newest buildings, for instance. Despite being one of the iconic buildings competing to define Nakuru’s skyline, it still has a number of floors unoccupied despite being opened nearly two years ago.
The building, located barely 50 metres off the town’s main street, is owned by Gilani’s Supermarket Ltd.
“Although we have average occupancy, we still have a lot of retail and office space available. Most of the current clients have committed to long-term leases. The uptake is slow and we are hoping it will improve with time,” Faiz Gilani, one of the company’s directors, said. He added that the slow uptake was due to an oversupply of office space in the town.
“Buildings are mushrooming in every corner of the town. Common among them are office spaces, which are not in high demand. New developers should diversify on the type of products they are bringing to the market,” Mr Gilani said.
He attributed the low uptake of retail space to low cash flow in the town.
Another eye-catching building in the town is The Jennifer Riria Hub, developed by Echo Network Africa, formerly Kenya Women Holding.
The mall located at the junction of Tom Mboya and Kipchoge Keino roads in Nakuru is an artistic modern facility with space for supermarkets, banking halls, specialty stores, restaurants, family entertainment outlets and shops.
James Muigai, the director at Muigai Commercial Agencies, which is managing the property, said they started seeking anchor tenants in April last year ahead of the official opening, but the uptake has been slow.
“We have been open for the past two and a half months. The mall is already 10 per cent occupied. However, the uptake is slow compared to our expectations,” he said.
He added that the situation has been a result of unfavourable economic conditions that have weighed on small and medium-sized enterprises (SMEs), with property managers forced to reduce rent.
“Since 2017, the business environment has not been favourable and many businesses have stagnated. More spaces to let are coming up every day, but this is not equal to the rate of growth of the enterprises. Rent for most buildings was reviwed downwards by 10 percent to 20 percent,” Mr Muigai said.
His business manages a number of buildings within Nakuru’s central business district.
Muigai pointed out that the most affected are buildings those with more than three floors, where the upper floors designed for medium enterprises have not been taken up.
He said the town had in recent years failed to attract new investors, which had seen it remain more of an agricultural town than an industrial metropolis.
“It is the bigger investors like supermarkets, hospitals and banks that attract other businesses to an area. These major investors have remained in Nairobi. It is their presence that attracts SMEs and other subsidiary service providers who take up the available office space.”
Muigai added that with industries now streaming back to the county, especially along the Nakuru-Eldoret Highway, demand for services offered by medium ventures would grow, and with it demand for the town’s commercial buildings.
However, despite the struggles by already established malls, new and bigger malls are coming up, among them the Sh1.6 billion Golden Life Mall being developed along the Nakuru-Eldoret Highway.
The mall, which will offer 34,000 square metres of space, is being developed through Egerton University’s Retirement Benefits Scheme and is expected to be open by October.
Advent Valuers, the company managing the property, advertised for anchor tenants to occupy the mall, which will have three floors of shopping mall space and six other floors of office space, including a doctor’s plaza.
Opposite Golden Life Mall is the Anglican Church-owned Imani Mall, which was opened in 2016 with Tuskys Supermarket as the anchor tenant.
Three years down the line, the mall is still under construction with some of its complete spaces yet to be taken up.
With Nakuru town positioning itself for a city charter, the county government has been urged to include landmark buildings in its campaign to popularise the upcoming metropolis.
Gilani said there were many landmark buildings in the town that, if included, the campaign would attract and assure investors of the availability of retail and commercial space for their use.
“It is not clear what the county government is using as a selling point to market the town for a city. The types of buildings in a town are a major indicator of the economic and infrastructural growth of a town. We feel this window has not been utilised by the county government,” he said.
Gilani is not alone in hoping that the town’s elevation will be a positive move. Governor Lee Kinyanjui said if elevated to city status, Nakuru would unlock its potential in accessing grants for development, spur the expansion of economic activities and win over investors and developers.
“Nakuru as a mere town cannot compare with Nakuru as a city. We will enter the global map in serious discussions about investments, tourism, aviation matters and attract ratings that will win us resources, industries and an upgraded economy,” he said.
Additional reporting by Mwangi Muiruri [email protected]
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