Istikbal Opens Flagship Store at Panesar Center, Nairobi

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Istikbal, a Turkish home furnish retailer, opened its flagship store, the first Kenyan outlet at Panesar Center along Mombasa Road.

The 3500-SQFT store adds to the brand’s 1,600 stores spread across 90 countries including Egypt and Ghana. 

The retail store will deal in innovative furniture, carpets, mattresses, garden furniture and home textile among many others. 

Kenya continues to attract foreign players owing to (i) growing demand for international brands, (ii) the supply of high-quality retail spaces that meet international standards, and (iii) the expanding middle-income class population, with increasing disposable incomes creating demand for differentiated retail products. 

For setting up shop, Mombasa Road remains attractive to the international players due to; (i) provision of high-quality spaces in line with international standards, for example, Nextgen Mall, (ii) improved infrastructure i.e. the expansion of Mombasa Road facilitating easy access, particularly to key logistic hubs such as the Jomo Kenyatta International Airport, the Inland Container Depot (ICD), and the Standard Gauge Railway (SGR) station, and (iii) low average rental charges at Kshs 156 per SQFT, 11.6% lower than the market average of Kshs 176 per SQFT according to Cytonn’s Kenya Real Estate Retail Sector Report 2019. 

Other international retailers that have entered into the Kenyan retail market in the past year include Tendam group, Giordano, Hugo Boss and Mango. 

The increased entry of multinational retailers is, therefore, a welcome move for developers who have been experiencing increasing vacancy rates due to the tough economic climate with occupancies declining by 3.9% points to 75.9% in 2019 from 79.8% in 2018, according to the Cytonn Annual Markets Review – 2019.

Even with the oversupply of retail office space by approximately 2.8 mn SQFT, we expect continued activities in the sector, supported by the continued entry of international retailers, which will buffer the sector in 2020.

Source: Cytonn Ivestments