By Eddah Waithaka
Retail is emerging as one of the most dynamic sectors of the East African economy. Kenya’s capital, Nairobi, has become not only a major retail market in its own right, but also a springboard for the rest of the country and East Africa as a whole.
Nairobi is an emerging regional shopping destination, the headquarters of many regional retail and food and beverage (F&B) companies, and a launch pad for retail concepts into other East African regions.
Urbanisation, a rising middle class and increased digital connectivity are driving growth in Nairobi’s retail sector, according to experts at the 11th annual East Africa Property Investment (EAPI) Summit Retail Forum, on 17th to 18th April in Nairobi, Kenya.
The increasing demand from digitally savvy middle-class Kenyans for local brand experiences that are in line with regional, continental and international trends is driving the growth of Nairobi’s retail sector. This has led to the development of strong local retail brands and an influx of international brands, all vying to capitalize on the market.
The growth of the retail sector in Nairobi has led to the emergence of strong local retail brands and opportunities. Retail plays a critical role in the real estate industry, driving the expansion of a vibrant property market. As such, retail and F&B will be the focus of the #EAPI2024 Retail Forum, organised in partnership with Village Market, Knight Frank and CBRE Excellerate.
The unique platform for East Africa’s retail sector to meet and network with the region’s leading landlords, brokers, financiers, advisory teams and more will help shape Africa’s most exciting retail market and explore regional and global trends.
Samuel Kariuki, CEO of Mi Vida, a gold sponsor of EAPI2024, says, “We have a very good human capital base. If you look at the Kenyan economy since 2003, it has grown 10X. We are 13 billion dollars economy where President Kibaki took over. Today we are a 130 billion dollar economy.
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“So the economy has grown 10X. What that then means is there’s been demand. You demand an economy that has also higher incomes. So a middle class has developed and will. And that is demand, incomes are growing, and businesses are investing in the country,” Mr. Samuel continued.
“That automatically comes with the demand for office space, commercial office space, and demand for homes. So what you’re seeing today as this accelerated demand is a cumulative effect of what we have seen since 2003,” Mi Vida’s CEO concludes.
Ryan Pape, Country Manager at CBRE Excellerate Kenya, notes that Nairobi’s infrastructure improvements and private sector investment have opened up the playing field for both local and international retailers and F&B chains.
“Nairobi’s infrastructural improvements and private sector investment has opened up the playing field to both local and international retailers and F&B chains. We see increased public and private investment into roads, rail, shopping malls, convenience malls, cold chains and distribution centres, to name just a few areas.”
Hooman Ehsani, Director of New Developments, Greenhills Investment Limited, which built the Village Market Shopping & Recreation Complex in Nairobi and has seen it through five expansions, including the Tribe Hotel, believes that well-positioned brands with the right product mix would do well to open a store in Nairobi.
“The Nairobi F&B scene has become considerably more vibrant and appealing over the last couple of years, with the success of some newer entrants catalysing more creativity and energy, and encouraging more entrepreneurs to venture into the space. Similarly, on the retail side, we’ve seen a significant spike in interest as business owners aim to meet a growing appetite, especially for locally produced fashion, home furnishings and beauty services.”
Ehsani adds, “Nairobi is now achieving a level of comfortable balance between retail space in the right locations and better-quality retailers with the right products for the market. There is renewed confidence within the business community and increased optimism around stability and growth opportunities.”
Wambui Mbarire, CEO of RETRAK Kenya, says the biggest recent change in the market is the increased diversity of retail partners leasing the newly developed space. “Whereas in the past there were one or two potential tenants with the capacity to lease prime retail properties, the growth of the sector has resulted in more options available to landlords.”
Mbarire notes that Nairobi, with its diversity and cosmopolitan nature, is a great place to test and tweak brands for launch into other Kenyan and East African towns and cities. “The urbanisation that we are seeing countrywide is also providing retail property players with additional locations outside of the traditional Nairobi, Mombasa and Kisumu axis. Good examples of this include Nakuru, Eldoret, Naivasha as well as Kajiado, Kitengela, Kiambu, Limuru, Thika and Ngong.”
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In today’s market, establishing a presence in Nairobi is exceptionally attractive for retail brands. The city’s upgraded infrastructure, combined with the robust growth of both local and multinational retailers, cements its position as one of the premier retail markets in Africa.
Murray Anderson-Ogle, GM of Marketing and Commercial at API Events, adds, “Kenya is a key market with many successful local homegrown retail brands, including those operating in the vibrant F&B arena, and it has the clear potential to be an African retail real estate powerhouse.”
All agree that the burgeoning retail market needs a platform to connect with its real estate stakeholders and the EAPI Retail Forum answers this need. The #EAPI2024 Retail Forum will take place exclusively in person at the Radisson Blu, Upper Hill, Nairobi.
“The understanding of this market’s changing needs that will be provided at the EAPI Retail Forum is beneficial to landowners, developers, investors, and property professionals alike,” highlights Pape.
“EAPI has been at the leading edge of the conversation around property trends in the region, and investment in retail and F&B operations has become a significant part of the investor interest,” says Ehsani.
Mbarire concludes, “This is the natural progression of the market, and establishing the EAPI Retail Forum now will ensure participation in one of the most vibrant sectors of the East African economy.”
