Eldoret town is set to welcome a new shopping complex – Buffalo Mall – in two years’ time following a joint effort between local and South African investors.
The developers of the new mall completed a similar project in Naivasha last year, in a bid to benefit from the consumption trends of the expanding middle class in the surrounding areas.
The family of the late politician Reuben Chesire, through Hornbill Developments, own the site where the mall will be located. South African firms Carlisle Property and Abland Property Developers are the other companies in the consortium dubbed Buffalo Mall Developments.
The project is expected to be completed in 2017.
“Buffalo Mall Eldoret will prove a key addition to Kenya’s retail landscape as national and international retailers seek to serve the aspirations of Kenyans in this important city. Already we are witnessing high levels of tenant demand,” said Buffalo Mall Developments in a statement.
The mall will be 14,250 square metres, and will be located on Kisumu Road, outside Eldoret town centre, which was chosen to increase accessibility.
The developers did not indicate the investment size of their new mall. Other recently constructed malls have, however, cost anything from hundreds of millions to billions of shillings.
“There has been an emphasis on design efficiency and the team will ensure the delivery of a world class shopping experience that will herald a new chapter and will set a different standard for our town, Eldoret. It will provide a facelift and decongest the town to ensure that Eldoret can leverage itself as a regional business and leisure hub,” said Hornbill chairperson Alice Chesire.
The business model of the mall follows in the trend where a developer partners with the landowner for a property project. In this case, the mall’s developers entered into a similar arrangement with the Delamere family who own the land where the first Buffalo Mall in Naivasha is located.
The Naivasha-based mall, which was opened in 2014, is bigger than its Eldoret affiliate (22,000 square metres) and has Tuskys Supermarkets as the anchor tenant.
Property consultancy Knight Frank said that rents for prime retail space have been stable at Sh5,000 ($48) per square metre per month, indicating that the market has been cooling off.
The firm, however, said that there is still interest from both foreign and Kenyan retailers who are looking for good quality retail space.
“Knight Frank continues to receive substantial interest from international traders, with most of the international investors citing sourcing of local partners as their main hurdle,” said the Knight Frank Report for the first half of the year.
While most of the shopping mall developments have been concentrated in Nairobi and satellite towns, developers are beginning to expand into other counties.
The Lake Basin Development Authority is building the Lake Basin Mall in Kisumu while Fusion Capital is putting up the Sh2 billion Meru Greenwood Park, a mixed development, in Meru.
As the middle class grows, it is expected that shopping complexes will increase to cater for its consumption habits.
According to a recent report by the Kenya National Bureau of Statistics, over one million Kenyans earn between Sh30,000 and above Sh100,000 – which is well above the KNBS Sh23,000 minimum threshold for middle-income earners.