This archive report was first published on 6 August 2020.
As the Covid-19 pandemic continues to ravage the economy, Kenyan malls are facing a severe crisis. The retail space in the property market has been one of the hardest-hit sectors this year, with a combination of factors contributing to the woes.
At the onset of the pandemic, retailers protested that mall landlords were reluctant to offer rental reliefs to them. However, the situation has taken a turn for the worse, with eight businesses at the Garden City mall facing the auctioneers' hammer owing to rent arrears in two weeks' time.
The affected businesses include restaurants, a clothes and shoes store, and a beauty parlour. According to a gazette notice published by Maduwande Auctioneers, the goods will be disposed of by way of public auction on Friday, August 19, 2020, at Garden City Mall, unless collected within 14 days from the date of publication.
Prime rental rates in retail fell from Sh492 ($4.2) per square foot monthly to Sh450 ($4.6), with occupancy levels averaging 80 per cent, according to the Kenya Market Update. Knight Frank attributed the fall in rental rates to an oversupply of retail space in certain locations, among other factors.
Foreign retailers are also complaining that dollar-based rents are pushing them out of business. South African fashion retailer TFG, which has four stores, is set to exit Kenya due to the new demand. TFG Group Chief Executive Anthony Thunström said, 'It's totally, utterly unenviable to be in Kenya. We've given notice, and we're going to exit Kenya.'
Africa's biggest supermarket chain Shoprite has also recently closed two branches in malls over the demand for dollar-based rent, among other reasons. Consumer shopping habits have changed significantly owing to measures instituted to curb the spread of the virus.
