NAIROBI, Kenya, Feb 9 – Nairobi has been ranked the top city with the largest shopping centre development pipelines in sub-Saharan Africa according to new research by Knight Frank.
The Shop Africa 2016 report, an inaugural review of sub-Saharan Africa’s retail markets shows Nairobi is the largest mall development hotspot with around 470,000 square metres of shopping centre space in the pipeline.
Nairobi has an existing mall space of 391,000 square metres which is denoted by malls such as The Junction, Sarit Centre and Garden City, ranking the Kenyan capital the largest retail market in the region by existing shopping centre floor space.
Key mall space in the pipeline includes the iconic Two Rivers Mall in Runda and The Hub in Karen, which opened on February 4, 2016.
Luanda in Angola comes in second while Lagos in Nigeria has the third largest mall pipeline, followed by Dar es Salaam in Tanzania with Maputo in Mozambique completing the top five hotspots for mall space development.
According to the report, the top five cities fit the profile currently targeted by investors in Africa; that is, large, fast-growing cities in economies that have seen rapid expansion.
Luanda expects to add more than 350,000 square metres, although that some of the long-standing large scale projects have seen significant construction delays.
At a national level, Nigeria has the largest shopping centre development pipeline in the region, spread out across its many other large cities besides Lagos.
“While Nairobi has had shopping centres since the 1980s, the current wave of development is creating modern malls that are setting new standards for the market in terms of size and quality,” the report states.
Also, among the new projects, there is a clear trend towards mixed-use development – as opposed to pure retail – as office, residential and leisure facilities converge.
“The developers of Nairobi’s modern malls are building new city hubs, where people can live, work, shop and play, all on the same site, in locations near key transport links.” says Retail Portfolio Manager at Knight Frank Kenya Ashmi Shah.
The Kenyan retail market remains dominated by local operators, the Shop Africa 2016 report notes, but international chains have assumed a growing interest.
Among international brands include French retailer Carrefour who will be an anchor tenant at both Two Rivers and The Hub.
Turkish fashion brand LC Waikiki will also enter the Kenyan market with a store at Two Rivers.
“Major international retail groups have developed an interest in the wider sub-Saharan region. Most international brands enter the region either through partnerships with local operators or franchise agreements. The variety of retailers seeking to expand their footprint in the region has helped the newly developed malls to absorb demand,” the report indicates.