Big malls in Nairobi are now making cinemas and the entertainment industry anchor tenants in a new drive aimed at increasing foot traffic and boosting returns. This is a shift from the traditional super retailer anchor tenant model which has suffered from the headwinds of oversupply in the city in recent times.
The variation in strategy was recently highlighted following the release of 2018 financials by NSE-listed REIT, Stanlib’s Fahari-I. The leadership highlighted that the addition of a modern 300 seat capacity, 3- screen cinema at Greenspan Mall which will be commissioned in the second quarter of 2019 is expected to increase their portfolio’s returns.
The 3D multi-functional cinema already forms 2.7 per cent of Stanlib Fahari-I retail estate portfolio and is valued at KSh. 85 million having cost KSh. 48 million. The cinema is underpinned by a 10-year lease.
“Looking at the current real estate market, investors can tap into the entertainment segment to increase returns as there are opportunities there. The need is even currently high in mid-tiers spaces than in upper markets,” Stanlib asset manager Ruth Okal said.
Among Nairobi’s major malls, some of the establishment that are already employing strategies from the entertainment industry include Two Rivers Mall, Sarit Centre, and 7-D Cinema at TRM while Garden City mall hosts the country’s second IMAX theatre according to The Star.
The packaging of entertainment and other customized facilities together with shopping is a global trend based on the desire by shoppers to add experience to shopping and the need by mall operators to attract and retain them in a mutually beneficial flow.