Expos give malls a new lease of life amid reduced footfall

Shoppers are seen walking in and out of Sarit Centre Mall Westlands shopping for Christmas.[FILE/Standard} The growing trend of supermarkets opening outlets in residential areas has been linked to the reduced footfall in major malls, which are now carving a niche in the expos and international exhibitions space. It is a strategy noted in the latest Knight Frank release, which points out how some malls, such as Sarit Centre, are utilising their strategic locations as they weather the changes in consumer behaviour. For newer malls, however, these businesses are focusing on convenience as their selling point, an area that is now being taken over by supermarkets encroaching on estates. The Knight Frank Kenya Market Update report for the first half of the year notes how, despite signs of global and local economic recovery, real incomes for most consumers continue to decline. These depressed earnings have affected the real estate retail space as owners of businesses in malls are coping with lower sales. The report adds that this trend is exacerbated by rising product prices. This is as manufacturers pass increased production costs - driven by higher tariffs, taxes, levies, and global geopolitical tensions onto consumers. "Consequently, mall footfall has declined, as many consumers opt to limit their visits," says Knight Frank in the report. The real estate consultant, however, points out that while the decline in mall footfall has not been dramatic, it is still measurable given that most malls use footfall tracking systems. "For tenants, this translates into reduced revenues," the report says. Knight Frank explains that the reduction is not yet severe enough to trigger rent adjustments with prevailing prime rents currently averaging Sh600 per square foot per month, exclusive of value-added tax (VAT). Some properties, however, are fetching more depending on factors such as location, property appeal, available services and building specifications. Consumer income These trends, says Knight Frank, underscore the retail sector's sensitivity to even minor fluctuations in consumer income. The report notes that large malls primarily target middle and high-income areas, with Kenya's low and lower middle-income populations being served by small outlets (retail shops or dukas) and other local retail chains. It notes an existing growth potential in the low and lower middle income market segment, citing the Jaza supermarket chain as one of the retailers that is carving a niche in this population. "Recognising a gap in serving this market segment, a local budget retail chain, Jaza, was established in 2023 to address this need. Since then, the brand has grown rapidly, expanding even into middle- and upper-income areas," the report says. The report says Jaza now operates 24 outlets, including 11 stores in Nairobi County. "To counter the impact of declining footfall, top-tier malls are exploring new ways to generate traffic and revenue. Prominent malls with strong locations are increasingly positioning themselves as venues for expos and international showcases," the report states. Sarit Centre hosts the Sarit Expo Centre, which has become the go-to venue for exhibitions and expos in Nairobi, especially for event planners who want to avoid the chaos associated with navigating the central business district. The other major venue for expos and exhibitions is at The Kenyatta International Convention Centre (KICC), located at the heart of Nairobi city. The report points out that in response to reduced revenues in malls, major retailers - particularly supermarkets - are shifting their strategy by expanding into residential neighbourhoods. "By bringing services closer to consumers, they aim to sustain engagement and spending, even in the face of economic pressure," the report says. "This shift has particularly affected foot traffic in malls, including well-established ones." It adds: "Meanwhile, in the push for convenience, the growing trend among supermarkets to open outlets in standalone residential buildings is likely also contributing to the gradual decline in mall traffic." However, despite reduced foot traffic, Knight Frank reports that leading malls such as Sarit Centre, The Junction Mall, and Village Market continue to enjoy occupancy rates above 85 per cent, benefiting from their strategic locations, brand equity, and loyal customer bases. "In contrast, newer malls are focusing on convenience as their unique selling proposition," it says. Even with the economic challenges associated with the retail business, Knight Frank notes key expansions in the period, among them Carrefour, which opened new branches in The Promenade, Westlands, Nairobi and Sea Angel Mall, Mombasa. This brings Carrefour's total outlets in Kenya to 29. In the same period, Naivas also expanded its footprint, launching its 110th store in Eneo, Tatu City, Kiambu County. Additionally, China Square, a household and personal goods retailer from China, opened new stores at Two Rivers and Greenspan Mall in Embakasi, bringing its total number of stores to seven. Panda Mart, which operates in the same niche as China Square, opened its second store at Galleria Mall, Nairobi.

Expos give malls a new lease of life amid reduced footfall

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