Nairobi’s History is Vital to its Retail Future

The hub karen

The Hub karen

The nineties in Nairobi were characterised by quiet and uninterrupted leafy suburbs and bungalows that stretched on as far as the horizon, and whatever the eye could see. This aspiring global metropolis may have lacked any great river to straddle, but it’s lifeline stemmed rather convincingly and recurrently from the double prong of administration and tourism, two key elements that have enabled it to retain its regional reign for over a century.

READ: The Architectural History of the Green City in the Sun

There was no vertical competition worth taking notice of in this era and social spaces were rather conventional and ‘natural’; families and their patriarchs were only interested in long and blissful weekend drives or walks to either the National Park, to catch up with close friends at Country Clubs, or randomly but occasionally venture to either the Yaya Centre in Kilimani or to the Mall and Sarit Centre in Westlands.

Even then, shopping malls were never places to go and hangout and eat – they were more so vestiges of serious businesses; traders in either clothes, dry-cleaning, banking or perishable goods at the supermarket. The only cinemas available in the nineties, often decked with queues that would stretch over half a kilometre long, were Kenya Cinema, the 20th Century and FOX Sarit (which happened to the newest and most state-of-the-art kid on the block.

Enter the 21st century and Nielsen data most recently ranked Kenya as the second biggest retail economy on the continent, after behemoth South Africa. Kenyans, previously contentedly oblivious to the silent retail race that had gripped much of the West, and big brother South Africa, swiftly took to the amalgamation of amenities at shopping centers. The society was rapidly being introduced to a juxtaposition of all manners and sorts, largely thanks to homegrown supermarket conglomerates that were diversifying their offering, by registering as anchor tenants at complexes that were cropping up across the city.

Nakumatt in the mid 2000s opened its most significant outlet at the corner of Ngong Road and Kingara Road, the Junction, a development that risked rivaling its own store at Prestige Plaza, but an opportunity its management would not let pass by, especially to Uchumi that was offered first dibs. This was part of a larger intrinsic framework that involved a shift in retail towards suburbia, rather than what was previously a critical angular core of Kenyatta Avenue, Kimathi Street and Mama Ngina.

Within no time, other stores were springing up as far and wide as in Doonholm Estate and Ongata Rongai, with the likes of mass market-centric Tuskys, Ukwala and Naivas Supermarkets seeking a cut in the pie. With the wholesalers, came the Banks, and the Salons, and the Restaurants & Cafes and the Cinemas. While nineties Nairobi residents would have enjoyed a cup of coffee in an alfresco Hotel balcony, the 21st century would be more characteristic of rooftop sundowners, coffee at a shopping mall cafe, or catching a movie within the confines of a shopping complex.

According to a Knight Frank 2015 report, 1.8million square feet of shopping mall space opened in Nairobi alone in 2015 and by 2017, it is expected that a further total of about 1.3million square feet will be added to this. Unreservedly, retail spaces are what drive the economic momentum of not just an urban area, but of the country. Shopping centers seek to, and more often than not successfully so, improve the quality of life of a town or a city.

In my next post, I’ll be looking at a crop of leading Shopping Centers in Kenya’s capital.

 

 

Advertisements

Infrastructural Development Opens Up Real Estate Across Kenya

Thika Superhighway | Photo: Jambonewspot

Thika Superhighway | Photo: Jambonewspot

Across the globe, Real estate and Infrastructure have always had close ties. Infrastructure developments often open up dormant areas and attract developers, which potentially generates high yields on investments.

Case in point, the construction of the Machakos People’s Park and the refurbishment of the town’s once grass thatched ‘stadium’ into a functional entity with decent amenities. Kenyans, and mostly those from the affluent Nairobi, Nakuru and Mombasa neighbourhoods have repetitively flocked to the ‘almost capital’ to enjoy the new attractions. A drive down to the town and it’s not difficult to notice the emergence of hotels, restaurants, tarmac roads and lots of other complimentary infrastructure.

Developers are integrating infrastructure facilities in their development plans, creating traffic to their property. In developments such as gated communities and large scale housing estates, it’s common place to find, as standard features, proximity to malls, or upcoming malls, shopping complexes, green areas and parks, gyms and swimming pools, amongst a host of other amentities. Infrastructural development lures real estate developments due to the appeal of the area. Roads infrastructure, for instance, has opened up areas influencing property value, prompting the appreciation of prices in adjacent areas.

This would explain the high density effect the construction of by-passes across Nairobi has had on once exclusive and pristine neighbourhoods as Kileleshwa, Runda, Lower Kabete and Lavington. The roads that traverse these landscapes now have adversly opened up areas that were once inaccessible and reserved.

Lamudi MD Dan Karua says, “Projects like Lamu Port Southern Sudan Ethiopia (LAPSSET), the Thika superhighway, bypasses like Eastern, Southern and Northern, and the restoration of other roads have made the property prices in these areas appreciate drastically. Developers are benchmarking value of their property based on proximity to these areas.”

jkia 1

Airports aren’t being left behind, also undergoing development, with the major example of this being Jomo Kenyatta International Airport. Here the opening of Terminal 1A and the construction of the Greenfield Terminal which kicked off construction late last year, is set to boost the Airport’s status as an international hub: As Kenya is the major economic hub in East Africa many international firms will set their base here.

Development of the Commuter Railway System around Nairobi and the construction of the standard gauge line from Mombasa to Kisumu will widen the catchment area of real estate developments. Often perceived as far-flung and difficult to reach, areas like Kitengela, Athi River and Mlolongo have now experienced unprecedented growth with the Syokimau Railway line.

Savannah Silicon

Developments in the ICT sector have also facilitated the development of these areas as Konza City is to be constructed in this region. In addition, over 90 percent of Kenya’s population now live within GSM signal range: one of the highest rates in Africa, a good indicator for the telecommunications sector in the country.

“The Ministry of Energy and Petroleum plans to inject 5,000MW-plus into the national grid increasing Kenya’s power capacity to over 6,700MW, by the end of 2016. The result is expected to be cheaper electricity and increased capacity in the grid,” Karua noted.

The Power Sector has undergone reforms that have led to efficiency gains of 1 percent of GDP. Part of Kenya’s Vision 2030 is to enhance the production of affordable and reliable electricity of energy generation of 23,000 MW from the current 1,735MW. A nuclear energy plant is to be set-up by 2022 which is expected to generate 1000 MW, coal mining is about to be started, geothermal energy is being boosted this is to deviate from the dependence of hydroelectricity which isn’t reliable. In the case of the water sector, Kenya has already established a Water Resource Management Authority.

Expansion and growth of infrastructure is imperative to real estate developments. The high property prices are reflective of the valuation property investors are taking to determine the value of their land or rent charged.