A consortium of investors that includes the aristocratic Delamere family is today set to break ground for construction of a shopping mall in Naivasha that is expected to be the town’s biggest on completion.
The group comprises British investors Lloyd Capital Partners, with 75 per cent shareholding, while the wealthy Lord Delamere family — also of British descent — controls a quarter stake.
The mall is expected to have a gross area of 22,000 square metres.
“Our focus is out of Nairobi. We are looking at the secondary and tertiary cities,” said Simon Trappes-Lomax, a director of Buffalo Mall, in an interview yesterday while explaining the choice of Naivasha.
Mr Trappes-Lomax said the choice is based on research, which has showed that while there is high demand for quality malls across major towns, most of the supply is skewed towards Nairobi.
The first phase of the shopping complex is expected to cost Sh700 million.
Its location is also targeted at shoppers who travel to the town on weekends or those travelling to further towns in the Rift Valley and Western Kenya.
Regulatory filings by the project developers show that the mall is to be constructed on an 18-hectare parcel of land on the north west edge of Naivasha town, adjacent to the Nairobi-Nakuru highway.
The developers are also borrowing from their experience in emerging markets such as Poland and Romania where they have designed similar malls.
Mr Trappes-Lomax noted there are no major shopping malls between Nakuru and Nairobi, a gap that Buffalo Mall plans to exploit.
The project is being built in phases, with a target to open doors to customers for Christmas shopping next year.
The first phase will have a gross area of 7,480 square metres but this can go up to 22,000 square metres in the subsequent phases.
“The later phases will comprise further shopping malls, restaurant and leisure, offices, apartments, hotel complex, warehouse and fuel stations,” says a report filed with the environmental regulator.
The project is being developed through a mix of equity and locally-sourced debt.
“The first phase is slightly over $8 million and is funded by our own equity and seeding debt from Housing Finance,” said Mr Trappes-Lomax.
Upon completion, it will be one of the largest malls in Kenya.
The Sarit Centre has a gross area of 30,000 square metres, the Junction Mall measures 26,000 square metres and the Galleria Mall sits on 12 acres.
Other mega malls coming up are also in the same range.
The Hub to be located in Karen, Nairobi, will have 30,000 square metres while the first phase of Garden City being put up in Nairobi and set to be the largest mall in East and Central Africa, will have 38,500 square metres.
The growth in shopping malls is being driven by a growing consumer class that wants wider variety.
Demand from the emerging middle class has seen international brands, developers, financiers and property management firms enter the Kenyan market.
“The combination of regional retailer expansion, international retailer entry and South Africa’s retail springboard all make for an exciting market that is ready to grow apace, but which is choked by a shortage of quality retail space,” said Broll Property Group chief executive Malcolm Horne in September.
Broll which opened a Nairobi office mid this year is the property management firm for the Hub, Karen.
The attraction of malls to investors is also driven by the high rents per square metre relative to other commercial, residential and industrial properties.