- According to a half-year market update by Knight Frank Kenya, footfall across retail centres steadily increased in the first quarter of the year.
- The retail market continues to primarily remain a tenants’ market.
Image: FILE
Easing of Covid-19 restrictions in the first half of 2021 saw increased traffic in malls as Kenyans resumed outdoor activities.
According to a half-year market update by Knight Frank Kenya, footfall across retail centres steadily increased in the first quarter of the year.
In April, however, there was a decline due to the government lockdown imposed.
Upon reopening the economy in May, the footfall once again gradually increased in the month and June.
Similar to last year, the report notes that occupancy levels for retail centres averaged 70-80 per cent, although more established malls recorded higher occupancy levels of up to 90 per cent.
A spot check by the Star at the Gateway Mall and Nextgen Mall on Mombasa Road showed improved traffic with most stalls experiencing activity.
Despite the improved footfall sentiment, Knight Frank notes that there were increasing requests from tenants who were considering surrendering their retail space.
This led to most mall landlords offering discounts of between 10-50 per cent, depending on the nature of business, to retain tenants.
According to the report, the retail market continues to primarily remain a tenants’ market.
Over the period, existing local and international retail brands continued to expand into established malls located in large catchment areas.
Local fashion brand Alladin opened up at the Junction Mall and Local House and Kitchenware retailer Homes and Beyond set base at Sarit Centre. American luggage retailer Samsonite opened its doors at The Hub.
Leading local and international supermarket operators in the half-year continued to battle for market share dominance, through expansion and capitalising on the void left by struggling retailers.
Local retailer Naivas took over recently vacated spaces by Tuskys along Muindi Mbingu Street in Nairobi’s CBD, Greenspan Mall in Eastlands, Kenyatta Avenue in Nakuru County and Bofa Road in Kilifi.
The retailer in May also opened a branch in Zion Mall, Eldoret County.
Local retailer Quickmart also took branches previously occupied by Tuskys.
These included Pioneer House in the CBD, Eldo Mall in Eldoret County and Mega Centre in Kitale
In February French supermarket chain Carrefour, opened at NextGen Mall along Mombasa Road, and in April at Garden City Mall, taking over space that was previously occupied by South African retailer Shoprite.
This was the last retail outlet held by Shoprite who have since exited the Kenyan market.
Similar to 2020, grocery retailing remained one of the most active segments in the retail sector.
According to Knight Frank, the second half of 2021 projects a positive outlook for the retail sector mainly due to the economic recovery, roll out of vaccinations, reopening of the economy and the easing of containment measures.
Meanwhile, in the period under review the report notes that monthly prime retail rent prices declined by 4.8 per cent to $4 (Sh440.40) per square foot from $4.2 (Sh462.42).
Prime commercial office rents fell from $1.12 (Sh123.31) per square foot per month to $1.10 (Sh121.11), even as absorption of the top two grades rose by 64 per cent as more people resumed working from the office.