CENTRAL BANK OF KENYA. Last Update 02/10/2020
US DOLLAR. Buy(108.3853) Sell(108.5853)
EURO. Buy(127.2800) Sell(127.5394)          STG POUND. Buy(140.0988) Sell(140.3929)
CHINESE YUAN. Buy(15.9583) Sell(15.9924) 
JPY(100). Buy(102.5987) Sell(102.7978)  
SAUDI RIYAL. Buy(28.8958)  Sell(28.9507)       AE DIRHAM. Buy(29.5046) Sell(29.5647)           Mombasa Investment Portal.

Mombasa offers best retail occupancy, yields

Analysts tip the coastal city to attract most investors owing to its demographics and minimal suply

Assistant Director Investment

SUMMARY

  • Mombasa is an attractive prospect for retailers due to minimal supply of mall space compared to other key counties, meaning less competition from rivals.
  • The purchasing power in Mombasa is also relatively high going by World Bank data which showed the county had the fifth highest GDP per capita in Kenya as at 2015 of $935.0 (Sh93,500) compared to a national average of $1,455.0 (Sh145,500).
  • Further, Mombasa benefits from a 100 per cent urbanised population, which boosts demand for formal shopping outlets.

 

 

Odoo text and image block

Mombasa maintains a strong performance in retail occupancy and yields compared to other principal towns such as Nairobi, Kisumu, Nakuru, and Nyeri which are registering an overall struggle to fill retail space, a new real estate report showed.

For developers, Mombasa county offers the best investment returns with average rental yields of 9.7 per cent for neighborhood malls compared to a market average of 9 per cent and also registered the highest occupancy rates of 98.4 per cent compared to a market average of 87.4 per cent, a weekly report by Cytonn showed.

Mombasa is an attractive prospect for retailers due to minimal supply of mall space compared to other key counties, meaning less competition from rivals. The purchasing power in Mombasa is also relatively high going by World Bank data which showed the county had the fifth highest GDP per capita in Kenya as at 2015 of $935.0 (Sh93,500) compared to a national average of $1,455.0 (Sh145,500). Further, Mombasa benefits from a 100 per cent urbanised population, which boosts demand for formal shopping outlets.

“We thus expect to witness more developers and retailers, expand to Mombasa, from Nairobi, which is sufficiently supplied, with an estimated total mall space of 5,800 meters square feet as per the report, the highest in sub-Saharan Africa, excluding South Africa,” the Cytonn report states.

In the retail sector, local retail chain, Naivas, announced plans to open its fourth outlet in the coastal city which will start operations from September this year. The outlet which will occupy 27,000 square feet at Mwembe Tayari mall will bring Naivas’ total store count in Kenya to 47, bucking the trend that has characterized the local retail scene where locally owned chains have been experiencing financial constraints and mismanagement issues leading to a closure of stores.

Kenya regional retail performance as at November 2017 shows that in Mombasa neighbourhood malls averaged 98.4 per cent and 9.7 per cent occupancy and yields respectively, compared to Nairobi (80.9) and (9.7), Kisumu (87.5) and (9.7), Mount Kenya (80) and (9.1), and Eldoret (90) and (7). The country’s average stands at 87.4 and 9 occupancy and yields respectively.

In the retail sector, for instance, Kisumu recorded an average rental yields of 9.4 per cent, outperforming Nakuru with 6.1 per cent. However, it’s lower than Mombasa and Nairobi which have average rental yields of 10.0 per cent and 9.7 per cent, respectively, showing the coastal county edging equally competitive peers.



Leave a comment

You must be logged in to post a comment.