Sh2.7 billion shopping mall slashes rent as supply glut bites
Rosslyn Riviera Shopping Mall, which sits on 4.5 acres in the plush Runda Estate, has moved to temporarily slash its rent costs for new tenants in a bid to attract businesses as it struggles to fill the property space.
The notice Riviera issued confirms findings of a recent real estate report that oversupply of mall space would spell trouble for property developers as it becomes harder to get tenants.
Knight Frank Kenya, the firm managing the property, says that occupants who enrol within this year will be exempted from paying full rent for the first six months and then pay only half of the rent for the six months that follow.
‘SHORT WINDOW’
“The discount is available to retailers who will sign up within the short window, with a view to enriching Rosslyn Riviera Mall’s tenant-mix and shopper experience,” Ashmi Shah, retail portfolio manager at Knight Frank Kenya told the Business Daily.
The rent at the mall ranges between Sh180 and Sh275 per square foot.
Construction of the Rosslyn Riviera Mall began in late 2014 and was reported to cost Sh2.7 billion. The developer Thaara Ltd is associated with real-estate businessman Peter Gethi, son of the late Moi-era police boss Ben Gethi.
In April, South Africa-based Vantage Capital bought a Sh800 million stake in the shopping mall which has three floors.
DOWNWARD PRESSURE
A review of the commercial property market by Grit Real Estate Income Group noted that even though the Kenyan real estate industry has seen upward movement in rental levels in recent years, due to increased development quality and international retailers entering the local market, there is likely to be downward pressure in rentals as the local retail supply reaches saturation.
At Rosslyn Riviera, Chandarana Supermarkets is the anchor tenant. Other tenants include Newscafe, Java House and Nairobi Hospital.
Knight Frank said the location was suitable for do-it-yourself stores, fashion and accessories, fresh foods, banks, footwear, restaurants, fast food outlets, bookstores, computers and accessories retailers, among others.