Naivas Supermarket Expands in Kenya, Opens Two Outlets

Proparco has acquired a 40 per cent stake worth $31.5 million (Sh3.7 billion) in Kenya's supermarket chain Naivas.

Naivas Supermarket has opened two new retail outlets in Kenya as part of its expansion plan in the country. This brings its total outlets to 79, making it the leading retailer in the country.

Naivas took over 28,000 SQFT of space previously occupied by Nakumatt at Oasis Mall in Malindi, Kilifi County and the other in Embakasi off Airport North Road, Nairobi County taking 27,000 SQFT of space previously occupied by Tuskys Supermarket.

The bullish expansion is a result of KSh6 billion funding received from a consortium of investors -International Finance Corporation (IFC), private equity firm Amethis and German sovereign wealth fund DEG- for a 30 per cent stake. 

“We are elated that our store openings have been greatly enhanced through the support of our stakeholders and investors who have strengthened and improved corporate governance, increased accountability and professionalism within the business,” Naivas chief commercial officer Willy Kimani said in a statement.

The retailer plans to open another outlet at Greenspan Mall in Donholm before the end of the year, a move that will see it take 57,000 SQFT of space previously occupied by Tuskys.

“The retailer’s decision to take over spaces in Embakasi is supported by the presence of a good transport network as the area is served by Airport North Road which will enhance client and supplier accessibility and the presence of the prime space left by Tuskys,” Cytonn Investments comment.

According to Cytonn Q3’2021 Markets Review Report, Eastlands where Embakasi is classified, recorded average rent per SQFT of Kshs 135, which is 19.6 per cent points lower than the market average of Kshs 168 per SQFT.

“This signifies the retailer’s decision to invest in the area due to affordability of the retail spaces. The affordability of the area has continued to increase demand for space in the area but has not quite picked pace due to fewer social amenities and poor infrastructure. 

Cytonn’s 2021 Retail Report, says the Kenyan retail sector performance recorded a 0.1 per cent increase in average rental yield to 6.8 per cent in 2021 from 6.7 per cent in 2020. 

Average occupancy rates also increased by 1.8 per cent points to 78.4 per cent in 2021 from 76.6 per cent in 2020, as a result of local and international expansions facilitated by an improving business environment.

“However, the performance of the retail sector is expected to be weighed down by the oversupply in the retail market at 3.0 million SQFT in the Nairobi Metropolitan Area (NMA) and 1.7 mn SQFT in Kenya’s retail market, and, the rise of rival e-commerce platforms such as Jumia which are slowly gaining traction and reducing the mainstream retailers’ market share.”

Experience working on communication and marketing departments and in the broadcast industry. Interested in sustainable development and international relations issues.

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