This archive report was first published on 7 May 2020.
As the COVID-19 pandemic continues to ravage economies and reduce footfalls in major malls, retailers are growing increasingly anxious over the delay by their landlords to offer rent relief measures.
According to a spot-check by Home & Away, some landlords have agreed to slash rents by up to 25 per cent, but this is not a widespread practice. The Retail Traders Association of Kenya (RETRAK) has proposed rent freezes and a 50 per cent waiver on service charges to mall landlords, but only a few have offered rental reprieves.
RETRAK Chief Executive Wambui Mbarire noted that very few mall landlords have given rent reprieve to retailers in light of the pandemic. "Very few have offered rental reprieves. The majority are still in negotiation," Mbarire said.
A report by property management firm Knight Frank noted that the retail sector was one of the hardest-hit by the pandemic, attributed to various government directives that have restricted movements. "The Retail sector is perhaps the most significantly affected in the property market," said the Knight Frank report.
Landlords are also demanding the clearance of any rental arrears first before any future discussion on reliefs can be held. However, some malls have offered concessions such as reduction on service charges by 50 per cent.
Pharmacies and traders selling indoor and outdoor exercise equipment have had a steady stream of shoppers, noted the report. However, the decline in footfalls has seen the rise of online retailers.
On May 7, 2020, the management of Imenti House, Nairobi CBD, informed stall traders that rents would be reduced by 25 per cent for three months, including May. "The management wishes to inform you that in view of the current economic crisis brought about by Covid-19 pandemic, it has considered a reduction of rent by 25 per debt for the months of May, June and July 2020," said the management in a notice to stall traders.
However, a trend noted by Knight Frank was "opportunistic buyers and tenants" taking advantage of the Covid-19 pandemic to place lower rents or purchase offers "hoping to meet distressed property owners to get a good deal."
