Sagaci in the news: African retail investment to shift towards secondary cities

Charles Ballard, head of retail and real estate at Sagaci Research, recently spoke to asset management firm Anaxago about the commercial real estate market in Kenya. “In Nairobi, there are now more than 60 shopping malls, and the market is beginning to look saturated.” he observed. “The problem in dynamic cities like Nairobi is no longer developing shopping centres but filling them. Imported products remain relatively expensive and not very affordable to the African middle class. The challenge for shopping centres is therefore to identify dynamic local or international retailers who are prepared to develop a retail offer specifically targeted at African markets.”
“International retailers who offer low prices are generally the most successful in Africa. Decathlon, for example, which opened a store in Nairobi in November 2018, has attracted the Kenyan middle class with quality products at affordable prices,” he added. “Modern retail has grown rapidly in regional capitals (e.g. Mombasa in Kenya) but much less in secondary cities. In the coming years, opportunities for retailers are increasingly moving from large urban centers to secondary cities.”
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