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South African retailer TFG is set to exit Kenya alleging that landlords are asking for dollar-based rentals, Reuters has reported.

TFG Group Chief Executive Anthony Thunström also said that over the last six-months, the Kenyan government has increased import duties, in some cases doubling them.

“It’s totally, utterly unviable to be in Kenya. We’ve given notice and we’re going to exit Kenya,” he said.

The fashion retailer has four stores in Kenya.

This comes, following reports that Shoprite Holdings, one of South Africa’s biggest supermarkets, was sued for Sh520 million in lost rent, months after it closed shop at The Waterfront Karen Mall.  

Shoprite had announced the closure of its Karen branch in April, citing reduced footfall. This saw about 104 staff that worked at the outlet to lose their jobs.

According to media reports, two companies belonging to late billionaire Nelson Muguku have gone to court to demand the payment in US dollars from Shoprite.

 Lease agreements

The firms say that they still have a 10-year contract with Shoprite and that the lease agreements did not provide for termination.

Kenyan retailers operating in major malls across the country have also raised concerns over the “silence” of their landlords on rental relief measures amid the Covid-19 pandemic that has impacted businesses.

Some commercial property developers have also vowed not to develop malls in the near future.

Centum Investment said it will not undertake the development of any commercial rental property in the next five years.

Centum Real Estate Managing Director Samuel Kariuki said the group will instead focus on managing the Two Rivers Mall, its two office towers and development of affordable residential housing.

The hype surrounding the boom of malls has fizzled out, leaving developers with burnt fingers. Most malls are struggling with low occupancy at the moment.

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South African retailer TFG Shoprite
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