Kenyans have a keen taste of for foreign stuff. It’s no wonder the eEast African nation of about 40 million people will host the region’s largest shopping mall in October.
The “Two-Rivers” shopping mall, an investment of listed financial firm Centum, will be looking to tap into a growing middle class in the region and an increasing number of expatriates working for multinationals in Kenya.
Mr James Mworia, Centum’s chief executive, said the choice of the construction’s location — in the middle of the diplomatic zone and near affluent residents — was mainly hinged on a decision to bring in global brands like Austrian jeweller Swarovski and health club chain Virgin Active.
The Two Rivers Mall will also have French hypermarket chain Carrefour as its anchor tenant, breaking off from a tradition of having a local retail chain, Nakumatt, Uchumi or Tuskys, as the main tenants.
“We had a lot of interest from local tenants, but we strongly felt that we needed to differentiate the offering,” Mworia said.
The number of shopping malls in East Africa have nearly doubled in the last five years as a new breed of consumers with a taste for high quality imported brands and better services grows.
Laying the Ground Work
Mworia starting off the project was not easy as they had to deal with skeptical investors, who thought the project was too ambitious, and undecided potential clients, who felt the market was not big enough for their brands.
But once it was on course money streamed in and the investment firm was even able to sell a 42% stake in the project to two undisclosed investors for a combined total of $75 million in mid-2014.
To attract the right kind of tenants, Centum had to build an infrastructure that included a proper road network, dedicated high-voltage power line to the site and an electricity sub-station, to ensure that the site was well serviced and accessible to customers.
“When people are looking to invest in commercial real estate the biggest barrier to entry is infrastructure,” Mworia said.
“It is easy to see it as a challenge but it is also an opportunity for a private developer who puts up a location and then addresses these problems.”