Wazua
»
Investor
»
Property
»
Mall Owners Rush to Get Out of the Mall Business
Rank: Elder Joined: 1/8/2018 Posts: 2,212 Location: DC (Dustbowl County)
|
Enyewe I'm starting to believe there is an oversaturation of malls in Nairobi City. Imagine 3 or so malls within a few tens of metres away from each other. And the food courts are largely empty. And stores look very idle. Add crazy overheads for such prime spaces. And competition from ordinary stores outside such malls with a fraction of the overhead! This niche is definitely a dangerous one to get into unless your mall product and location is outstanding and unique.
|
|
|
Rank: Member Joined: 1/1/2011 Posts: 396
|
MugundaMan wrote:Enyewe I'm starting to believe there is an oversaturation of malls in Nairobi City. Imagine 3 or so malls within a few tens of metres away from each other. And the food courts are largely empty. And stores look very idle. Add crazy overheads for such prime spaces. And competition from ordinary stores outside such malls with a fraction of the overhead! This niche is definitely a dangerous one to get into unless your mall product and location is outstanding and unique. The estimation of Kenyan "middle class" is overblown. It is not even that they don't exist....but they spend their disposable income VERY differently from their Weestern or other counterparts.
|
|
|
Rank: Elder Joined: 7/26/2007 Posts: 6,514
|
Imagine if that Riviera guy had built a hospital and tied up with some indian medical outfit. He would have had a captive market in that area, and could have done both high cost and low cost cover. Business opportunities are like buses,there's always another one coming
|
|
|
Rank: Elder Joined: 1/8/2018 Posts: 2,212 Location: DC (Dustbowl County)
|
jmbada wrote:MugundaMan wrote:Enyewe I'm starting to believe there is an oversaturation of malls in Nairobi City. Imagine 3 or so malls within a few tens of metres away from each other. And the food courts are largely empty. And stores look very idle. Add crazy overheads for such prime spaces. And competition from ordinary stores outside such malls with a fraction of the overhead! This niche is definitely a dangerous one to get into unless your mall product and location is outstanding and unique. The estimation of Kenyan "middle class" is overblown. It is not even that they don't exist....but they spend their disposable income VERY differently from their Weestern or other counterparts. True that! I like that reasoning. I seldom go to malls because they are overpriced and I can get everything cheaper elsewhere. Plus most charge for parking when parking should be free. Malls as a business model in the Kenyan R. E. Sector are risky!
|
|
|
Rank: Elder Joined: 1/8/2018 Posts: 2,212 Location: DC (Dustbowl County)
|
https://www.construction...hopping-malls-strategy/
Interesting article. This is so true: Quote:
Greenspan shopping mall in Nairobi.
A shopping mall in Nairobi. PHOTO/FILE
In the past few years, developers have spent billions of shillings to put up show-stopping malls in Kenyan cities to meet the rising demand from international retail brands expanding into the country.
This has left the capital Nairobi with 630,000 square metres of existing mall space with an additional 98,000 square metres expected to enter the market this year, according to Mauritius-based multinational Grit Real Estate Income Group, which holds substantial interests in the Kenyan real estate market.
Countrywide, investors have built 761,805 square metres of retail space with more than 250,000 square metres expected to enter the market in the next 18 to 24 months.
Nairobi accounts for about 73 per cent of the total number of shopping malls in the country, with Two Rivers Mall (67,000 sqm), Garden City (35,000 sqm) and The Hub (35,000 sqm) being the largest shopping malls in the city.
While this can be described as a booming market, the shopping mall business itself is struggling to make money.
Although the mall culture is increasingly gaining popularity among residents, many retailers are complaining that the footfalls (the number of ‘shoppers’) are not getting converted into business.
Residents of Nairobi and other major cities and towns where stunning malls have been erected throng the facilities on weekends – spending cash on bites at food courts – but are very reluctant to shop at the malls especially at expensive outlets.
Imagine Mugundaman traipsing through Two Rivers on a Saturday morning. He will already start complaining bitterly about having to pay for parking even before he steps in. Then there he goes..huyooooo...past all the sijui LC Waikikis and all sorts of "high end" hopeless jewelers that charge 500k for a diamond ring - marching solidly to Carrefour. Hata ndani ya carrefour - the cheapest of all the outlets in the whole mall - he will be very price conscious. He will pick up a 1kg frozen kuku with skepticism. Ati 8 hundred bob? Sahau. These things go for 450 bob at Naivas. 300 bob or less from my neighbour Kamau a.k.a "Gitono" (desert locust) who breeds the real thing in his back yard. And his is tastier! After walking around getting good exercise reading the "high priced" labels of the food, he will only happily emerge from the store with two packets of KCC milk for tea and perhaps a bunch of spinach. He carried his own bag to avoid getting ripped off of 10 bob for a new one of course. If there is a java nearby he might head there for the free wifi. Out of guilt he may order something. Always from the bottom left "tiny print" corner of the menu. "Bring me two sausages, one egg - all on the same plate - and house coffee white" Total bill 590 bob. And will still complain that he could have made this meal at home for a fraction of the price. Meanwhile he is busy investing all over the place tu. How can such a person be a customer of a high end shop in a mall? Haiwesekani hata kamwe. This is good for the economy though. The more of such people we have the faster the country will develop because they are not wasting money on consumerism that adds zero to national savings nor the personal bottom line. The Chinese are also the same. By the time you see a Muchina blowing thousands in a casino you know tens if not hundreds of millions are busy relaxing in his accounts. Wahindi are worse. Trying to get a muhindi to part with a shilling is like trying to get blood out of a stone. Ask Russell Peters. . That's why their economies are growing at crazy %'s.
|
|
|
Rank: Veteran Joined: 5/5/2011 Posts: 1,059
|
Last Sunday I felt the pain of being ripped off, I walked into a mall around 8pm to buy superglue, the mtaa hardware was closed, I took two my calculations are that's 60 Bob thate thate each, shock on me when I got the change and each was 160 Bob, I cursed my impatience, madam came fuming also looking at the 10 carrots she bought at 190, saying that's a whole kasuku at the market with most somehow well to do Kenyans thinking like us then malls are in trouble, supermarkets are the ones keeping some malls going To Each His Own
|
|
|
Rank: Elder Joined: 1/8/2018 Posts: 2,212 Location: DC (Dustbowl County)
|
kayhara wrote:
Last Sunday I felt the pain of being ripped off, I walked into a mall around 8pm to buy superglue, the mtaa hardware was closed, I took two my calculations are that's 60 Bob thate thate each, shock on me when I got the change and each was 160 Bob, I cursed my impatience, madam came fuming also looking at the 10 carrots she bought at 190, saying that's a whole kasuku at the market with most somehow well to do Kenyans thinking like us then malls are in trouble, supermarkets are the ones keeping some malls going
 @Kayhara, you and many others like us are the reason why Kenya's middle class beats it's US and British counterparts in wealth by a country mile. In fact hiyo 30% mentioned in the article I believe is an understatement IMHO.
|
|
|
Rank: Member Joined: 6/15/2013 Posts: 301
|
MugundaMan wrote:https://www.constructionkenya.com/6166/kenya-shopping-malls-strategy/ Interesting article. This is so true: Quote:
Greenspan shopping mall in Nairobi.
A shopping mall in Nairobi. PHOTO/FILE
In the past few years, developers have spent billions of shillings to put up show-stopping malls in Kenyan cities to meet the rising demand from international retail brands expanding into the country.
This has left the capital Nairobi with 630,000 square metres of existing mall space with an additional 98,000 square metres expected to enter the market this year, according to Mauritius-based multinational Grit Real Estate Income Group, which holds substantial interests in the Kenyan real estate market.
Countrywide, investors have built 761,805 square metres of retail space with more than 250,000 square metres expected to enter the market in the next 18 to 24 months.
Nairobi accounts for about 73 per cent of the total number of shopping malls in the country, with Two Rivers Mall (67,000 sqm), Garden City (35,000 sqm) and The Hub (35,000 sqm) being the largest shopping malls in the city.
While this can be described as a booming market, the shopping mall business itself is struggling to make money.
Although the mall culture is increasingly gaining popularity among residents, many retailers are complaining that the footfalls (the number of ‘shoppers’) are not getting converted into business.
Residents of Nairobi and other major cities and towns where stunning malls have been erected throng the facilities on weekends – spending cash on bites at food courts – but are very reluctant to shop at the malls especially at expensive outlets.
Imagine Mugundaman traipsing through Two Rivers on a Saturday morning. He will already start complaining bitterly about having to pay for parking even before he steps in. Then there he goes..huyooooo...past all the sijui LC Waikikis and all sorts of "high end" hopeless jewelers that charge 500k for a diamond ring - marching solidly to Carrefour. Hata ndani ya carrefour - the cheapest of all the outlets in the whole mall - he will be very price conscious. He will pick up a 1kg frozen kuku with skepticism. Ati 8 hundred bob? Sahau. These things go for 450 bob at Naivas. 300 bob or less from my neighbour Kamau a.k.a "Gitono" (desert locust) who breeds the real thing in his back yard. And his is tastier! After walking around getting good exercise reading the "high priced" labels of the food, he will only happily emerge from the store with two packets of KCC milk for tea and perhaps a bunch of spinach. He carried his own bag to avoid getting ripped off of 10 bob for a new one of course. If there is a java nearby he might head there for the free wifi. Out of guilt he may order something. Always from the bottom left "tiny print" corner of the menu. "Bring me two sausages, one egg - all on the same plate - and house coffee white" Total bill 590 bob. And will still complain that he could have made this meal at home for a fraction of the price. Meanwhile he is busy investing all over the place tu. How can such a person be a customer of a high end shop in a mall? Haiwesekani hata kamwe. This is good for the economy though. The more of such people we have the faster the country will develop because they are not wasting money on consumerism that adds zero to national savings nor the personal bottom line. The Chinese are also the same. By the time you see a Muchina blowing thousands in a casino you know tens if not hundreds of millions are busy relaxing in his accounts. Wahindi are worse. Trying to get a muhindi to part with a shilling is like trying to get blood out of a stone. Ask Russell Peters. . That's why their economies are growing at crazy %'s. Sitaki matusi, but the British economy, amongst other Western nations, is highly reliant on the retail sector, especially fashion to keep the economy ticking.
|
|
|
Rank: Elder Joined: 12/7/2012 Posts: 11,937
|
mulla wrote:MugundaMan wrote:https://www.constructionkenya.com/6166/kenya-shopping-malls-strategy/ Interesting article. This is so true: Quote:
Greenspan shopping mall in Nairobi.
A shopping mall in Nairobi. PHOTO/FILE
In the past few years, developers have spent billions of shillings to put up show-stopping malls in Kenyan cities to meet the rising demand from international retail brands expanding into the country.
This has left the capital Nairobi with 630,000 square metres of existing mall space with an additional 98,000 square metres expected to enter the market this year, according to Mauritius-based multinational Grit Real Estate Income Group, which holds substantial interests in the Kenyan real estate market.
Countrywide, investors have built 761,805 square metres of retail space with more than 250,000 square metres expected to enter the market in the next 18 to 24 months.
Nairobi accounts for about 73 per cent of the total number of shopping malls in the country, with Two Rivers Mall (67,000 sqm), Garden City (35,000 sqm) and The Hub (35,000 sqm) being the largest shopping malls in the city.
While this can be described as a booming market, the shopping mall business itself is struggling to make money.
Although the mall culture is increasingly gaining popularity among residents, many retailers are complaining that the footfalls (the number of ‘shoppers’) are not getting converted into business.
Residents of Nairobi and other major cities and towns where stunning malls have been erected throng the facilities on weekends – spending cash on bites at food courts – but are very reluctant to shop at the malls especially at expensive outlets.
Imagine Mugundaman traipsing through Two Rivers on a Saturday morning. He will already start complaining bitterly about having to pay for parking even before he steps in. Then there he goes..huyooooo...past all the sijui LC Waikikis and all sorts of "high end" hopeless jewelers that charge 500k for a diamond ring - marching solidly to Carrefour. Hata ndani ya carrefour - the cheapest of all the outlets in the whole mall - he will be very price conscious. He will pick up a 1kg frozen kuku with skepticism. Ati 8 hundred bob? Sahau. These things go for 450 bob at Naivas. 300 bob or less from my neighbour Kamau a.k.a "Gitono" (desert locust) who breeds the real thing in his back yard. And his is tastier! After walking around getting good exercise reading the "high priced" labels of the food, he will only happily emerge from the store with two packets of KCC milk for tea and perhaps a bunch of spinach. He carried his own bag to avoid getting ripped off of 10 bob for a new one of course. If there is a java nearby he might head there for the free wifi. Out of guilt he may order something. Always from the bottom left "tiny print" corner of the menu. "Bring me two sausages, one egg - all on the same plate - and house coffee white" Total bill 590 bob. And will still complain that he could have made this meal at home for a fraction of the price. Meanwhile he is busy investing all over the place tu. How can such a person be a customer of a high end shop in a mall? Haiwesekani hata kamwe. This is good for the economy though. The more of such people we have the faster the country will develop because they are not wasting money on consumerism that adds zero to national savings nor the personal bottom line. The Chinese are also the same. By the time you see a Muchina blowing thousands in a casino you know tens if not hundreds of millions are busy relaxing in his accounts. Wahindi are worse. Trying to get a muhindi to part with a shilling is like trying to get blood out of a stone. Ask Russell Peters. . That's why their economies are growing at crazy %'s. Sitaki matusi, but the British economy, amongst other Western nations, is highly reliant on the retail sector, especially fashion to keep the economy ticking. I like the disclaimer, but why are you guys scared of this mugundaman clueless dustbowl fellow yawa? Just yaps, wont do anything to you my fren, he found us here and he will leave us here. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
|
|
|
Rank: Elder Joined: 1/8/2018 Posts: 2,212 Location: DC (Dustbowl County)
|
mulla wrote:
Sitaki matusi, but the British economy, amongst other Western nations, is highly reliant on the retail sector, especially fashion to keep the economy ticking.
Sina matusi, if a person is civil with me I am VERY civil with them. Yes, of course retail sector/services are very important : even in Kenya. US retail sector - strongest in the world - has always boomed thanks to the financial illiteracy (spend, spend, spend) of their middle class. This is why American middle class wealth has eroded steadily into the hands of the corporates there since the 1960s! The average American is living lavish on loans and credit cards. The average middle class Kenyan owes nobody and spends wisely as they accumulate assets debt free over time.
|
|
|
Wazua
»
Investor
»
Property
»
Mall Owners Rush to Get Out of the Mall Business
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|