SA property management firm sets up hub in Nairobi

Broll, a South African property management firm, has opened a Nairobi office as more retailers and major brands enter the Kenya market. Broll reckons that investors will be followed by developers and managers seeking to service the investments.

“Kenya’s retail property market is growing and the list of new retailers entering the market is deepening; the retail market here is primed and is ripe for growth,” said Broll Kenya’s newly appointed managing director Jonathan Yach in a statement.

Broll says that servicing shopping malls housing the outlets is a market that has higher returns compared with other property sectors.

“Research suggests that retail property investments are outperforming residential property investments, thanks to strong and growing demand,” says Broll Property Group’s 2013 annual property report.

The firm on Wednesday declined to disclose its clients although South African large retailers are some of the investors poised for huge investments in the country.

Largest complex

South African retailer, Game, has confirmed that it will be a tenant in Garden City Mall along Thika Superhighway, which will be the region’s largest shopping complex on completion in 2017. The first phase should be completed in December 2014.

Massmart, another South African retailer, is also shopping for buyouts in the region.

US fast-food chain KFC has expanded to the Kenyan market while retail chains Foschini, Edgars and food outlet Subway are on the way.

“Broll are under confidentiality agreements with many of the clients at present and therefore we will advise in due time as they are announced,” said the firm when probed.

The firm’s report shows that annual yields from the retail market are 10.5 per cent while residential yields are six per cent per annum.

Yields from industrial property are the highest at 12 per cent, while office space yields are at nine per cent. Broll’s numbers are close to those of international property management firm, Knight Frank, which will manage Garden City Mall.

Knight Frank’s Africa Report 2013 says that the annual yield from Kenya’s retail property market is 10 per cent, while that for the residential market is six per cent. It says that industrial and office properties have a 12 per cent yield, similar to Broll’s findings.