Thursday, June 30, 2022

Shopping malls in Kenya now asking for just half rent as tenants flee

Shopping malls in Kenya are running on empty and have resulted to offering discounts of up to fifty per cent in a bid to survive. According to a market review report by property firm Knight Frank, tenants have been asking for rent discounts to sustain their businesses.

In other cases, tenants have been shutting down altogether, forcing mall owners to offer huge rent discounts to attract new customers.

“Over the review period, it was noted that there were increasing requests from tenants who were considering surrendering their retail space. Landlords have responded by providing rental concessions to retain tenants, ranging between 10- 50 percent depending on the nature of business,” said Knight Frank. “Similar to last year, occupancy levels for retail centres averaged 70-80 percent, although more established malls recorded higher occupancy levels of up to 90 percent.”

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Over the past few years, shopping malls in kenya have been facing tough times. In 2018, the Rosslyn Riviera Mall offered free space for a period of up to six months. Thereafter, businesses would be getting 50 per cent discounts on rent. This Sh. 2.7 billion three-level shopping mall was launched in early 2017. Ahead of its launch, the developers were expected to add 116,000 square feet of retail space in the market targeted at shops, restaurants, and entertainment and wellness outlets. The owners were targeting the residents of Rosslyn, Muthaiga, Runda, Nyali, Gigiri, and Rwaka.

According to the Knight Frank report, monthly prime retail rent prices declined by 4.8 percent — to $4 (Sh. 435) per square foot from $4.2 (Sh. 457).

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