See More

SA shop brands bloom in E Africa

Mar 31 2011 08:27 Reuters

Company Data


Last traded 87
Change -2
% Change -3
Cumulative volume 550290
Market cap 0

Last Updated: 26-03-2015 at 04:17. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 83
Change -2
% Change -3
Cumulative volume 2108093
Market cap 0

Last Updated: 26-03-2015 at 04:17. Prices are delayed by 15 minutes. Source: McGregor BFA

Related Articles

Liquidated malls to be auctioned

Malls getting fuller, says Hyprop

Malls still make moolah

Malls prepare for better times

More new malls

Auction of malls cancelled

Nairobi - Shopping malls are springing up across east Africa faster than ever before as retailers seek to tap into a swelling middle class with growing disposable incomes and a limited choice of leisure activities.

At least nine new malls will be throwing open their doors this year across the region. Five of them, with a total area of 670 000 sq feet, are poised to open in Kenya - the regional economic powerhouse.

At weekends, cars crawl around parking lots at sprawling malls in the capital Nairobi in the hope of finding a spot so people can shop, visit food courts and cinemas, or just hang out in swanky cafes with wifi on tap.

"Prime retail centres will be in high demand because we now have more affluent shoppers and a growing middle class," said Paul Kavuma, head of Catalyst Principal Partners, a private equity fund that invests in consumer goods companies.

East Africa's economies have weathered the global financial slowdown and recent droughts and are now projected to expand by an average 5.2% in 2011 and 5.7% next year. Investors say that with these kinds of gross domestic product (GDP) growth rates in the coming years, the conditions are ripe for a rapid expansion of the retail sector.

"Consumer demand grows between two to three times the pace of a country's GDP growth. Spending across east Africa is growing at about 15% per annum," Kavuma said.

In neighbouring Uganda, construction of a 200 000 sq feet shopping mall, the country's biggest yet, starts this year.

While the Ugandan economy is less than half the size of Kenya, economic growth is expected to surge into double digits when oil production starts in earnest in the coming years.

In Tanzania, the region's second biggest economy, two new malls will be built in the commercial capital and port city of Dar es Salaam.

In total, construction of malls is likely to cost at least 5 billion shillings ($58m) this year, according to Maina Mwangi, commercial director at real estate agency Knight Frank.

Expensive brands

According to Humphrey Moshi, an economics professor at the University of Dar es Salaam, the explosion in mall construction can be attributed to massive pent-up demand for consumer products such as electronic gadgets.

Plush shopping malls in Nairobi all have several outlets selling the latest mobiles while flat-screen TVs and home cinema systems can be found in supermarkets and electronics stores.

The boom in swanky malls is also attracting international retailers and well-known brands that need a concentration of well-heeled shoppers to justify their investment.

"We would have expanded faster, by about 30%, if there was adequate presence of malls," said Muchiri Wahome, chief executive at Deacons.

Deacons is a Kenyan firm with 25 franchise outlets for retailers such as South Africa's Truworths International [JSE:TRU] and Woolworths Holdings [JSE:WHL].


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
1 comment
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The upcoming electricity and fuel price hikes will:

Previous results · Suggest a vote