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Kenya’s real estate retail market evolution (1983 – 2023)

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Kenya Real Estate Retail Market 6

Kenya’s formal retail market has grown over time since 1983 to meet the rising demand for quality shopping centres.

This has mainly been driven by positive demographics, improved infrastructure services, and a favourable business environment.

Additionally, foreign capital has played a key role in the influx of international retailers and developers into the country over time, due to the demand for products and services.

Notably, the wholesale and retail sector currently accounts for 15.4% of FDI in the country and has consistently been in the top three largest contributors to Kenya’s GDP.

Overall, formal retail space has grown by approximately 28.3% p.a on average since 1983, with the current total stock tracked by estate intel amounting to 1,232,925 m2.

Notably, approximately 15% of the retail malls were developed by foreign investors, while the remaining 85% were constructed by domestic investors.

Kenya Real Estate Retail Market 2

Source: Estate Intel

Compared to other African countries, Kenya had a head start in this market.

As a result, it has since featured as one of the leading retail hubs in Africa, with Nairobi having a density estimated at 0.14, higher than other cities in Africa such as Lagos and Accra with 0.018 and 0.06 respectively.

As such, this article seeks to highlight the sectors’ evolution with significant timelines in Kenya’s retail formalization:

The penetration of Kenya’s formal retail market dates far back to 1983.  The opening of Sarit Center in that year marked the country’s first shopping mall located in Nairobi’s Westlands District, with a leasable area spanning over 20,903 m2 in the first phase of construction.

Interestingly, this later influenced the introduction of other shopping malls in the country such as the Yaya Center in 1992, and Village Market in 1995, among others.

Consequently, a total of 67,895 m2 of retail space was added to the market during the period under review.

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Sarit Centre, Kenya’s First Shopping Mall

With an increasing middle-class population, Kenya’s retail market witnessed the addition of 106,069 m2 of stock between 2000 and 2010.

This was mainly influenced by the uprising of homegrown retail brands such as Nakumatt and Uchumi. Notably, these were Kenya’s retail giants and primary anchor tenants for more than a decade.

Overall, this resulted in key completions of neighbourhood and convenience centres such as the Westgate Mall in Westlands, Capital Center along Mombasa Road, and Junction Mall in Kilimani, among others.

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Junction Mall Nairobi

This period marked an increased interest by foreign investors and developers in the retail market.

Notably,  While Actis had already debuted in the market through the development of the Junction Mall project in 2004, it expanded and completed the second phase of the mall in 2013.

They further launched the Garden City Mall in 2013 which was completed in 2015. Additionally, this is the period when South Africa’s Stanlib raised capital to establish Kenya’s first REIT, with the Greenspan Mall being an underlying property.

Other notable milestones were Avic International Real Estate’s construction commencement of GTC as a mixed-use development in Westlands, whereas Delamere Group launched and completed the Buffalo Mall project in Naivasha.

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