Kenya’s retail property market is fast becoming one of the most sought after growth markets for South African real estate firms and retail companies, said Org Geldenhuys, MD of property development and marketing company, Abacus DIVISIONS.
“It is definitely a popular market for South African companies who realise they can attain high levels of growth in Kenya- perhaps recording higher returns than the local market.”
What has had an influence on this development is the growth of Kenya’s middle class. In 2008, 28 per cent of Kenya’s population was made up of its middle class, and according to a McKinsey report, Africa already has more middle-class consumers than India.
With a growth forecast of over five per cent by 2014, Kenya is recording a rapidly-growing middle class, together with a relatively untapped retail real estate market.
Because of this, a number of South African retail firms have selected Kenya as a potential robust market –and a new one at that.
One of the other drawcards is that, from a macroeconomic space, the country is quite stable – with Kenya able to brag that its currency is projected to be stable against the dollar.
“This goes a long way to allay investor concerns,” said Geldenhuys.
Commenting in CNB Africa.com, Raphael Mwito, development manager at Mentor Management in Kenya, said: “The central bank is on top of the monetary policy, the treasury is on top of the fiscal policy. The economic growth story is positive, the other positive is a middle class that is growing so rapidly and disposable incomes are really growing. The disposable income growing has a direct impact on how much people can spend.”
Commenting further, Mwito said that despite Kenya having one of the strongest and largest economies on the continent, there are a limited number of shopping malls.