Kenya has a pipeline of more than 570,000 square feet of upcoming mini-malls over the next two years, signaling the increased demand for shopping centres specifically smaller aesthetic establishments to attract the younger generation.
A mini-mall is a shopping complex containing a row of various stores, businesses, and restaurants that usually open onto a common parking lot. Each of the retail outlets in a mini-mall is accessed from the outside rather than from an interior hallway.
The Knight Frank Market Report for Kenya shows that at least seven commercial retail developments with a cumulative space of 575,000 square feet (sq. ft.) are ongoing with projected completion dates between 2025 and 2027.
The pipeline follows the high occupancy and rental yield of 9.5 percent per annum from malls.
“Prominent malls continue to achieve high occupancy rates of over 90 percent and command prime monthly rents exceeding Sh600 per sq ft. However, these high rents deter small-scale retailers targeting low-income populations, limiting the growth of shopping malls,” said Knight Frank.
Mini-malls or strip malls, which typically range from 5,000 sq. ft. to 100,000 sq. ft depending on location and purpose, are prominent in other developed nations such as the United States but are making their way in Kenya’s capital despite competition from larger and more established malls.
Strip malls offer convenience to shoppers because of a mix of different stores and services in one location, accessible parking, and are located along major highways.
These locations are typically smaller than regular malls with accessible parking near main highways.
The construction of the Community Mall along Magadi Road will add 100,000 square feet to the retail sector.
Expansion of the Junction Mall along Ngong Road and Galleria Mall in Karen will add 100,000 sq ft each.
The Junction serves the suburban areas of Kilimani, Ngong Road, Westlands, Lavington, Kileleshwa, and Karen.
Promenade development on Rhapta Road offers 75,000 sq ft for investors in the retail space and along Gitanga Road, Laving Square will add 70,000 sq ft to the sector.
Elgon Road in Upperhill offering 60,000 sq. ft. is set to be complete next year.
“Developers are now focusing on mini-malls, driven by reduced disposable incomes and the historical oversupply in the larger mall market,” said Knight Frank.
Several renovations were made to malls in a bid to attract young clients and drive footfall to various stores.
“Key examples include the Hub Karen Mall, that unveiled the Hub Park, a circa 34,400 sq. ft. Indoor play arena and among the largest indoor play area in East Africa, and Prestige Plaza which introduced Prestige Play Park, dubbed “Playza”.
In an earlier interview with Knight Frank Portfolio Manager Ashmi Shah, it emerged that malls were making a comeback partly attributed to a surge of younger visitors, some who shop in the stores within the hypermarkets and others who went for experiences and dates to food courts among others.
“Gen Zs frequent the malls that have an aspect of lifestyle and entertainment including cinemas, gaming food, and retail outlets. Not only do they go to shop at the malls but they also spend time within the entertainment zones,” said Ms Shah said in an interview with the Business Daily.
“This generation frequents the malls for events such as game nights, exhibitions, pop-up markets, etc. In addition, the youngsters enjoy the social aspect of visiting malls where they get to meet their friends,” says Ms Shah.
