Cytonn Real Estate, the development affiliate of Cytonn Investments, has released their Kenya Retail Sector Report-2020.
The report analyses the performance of the retail sector in Kenya through tracking the changes in occupancies, rental yields and rental rates. It also outlines the retail space demand, opportunity and outlook of the sector.
According to the report, the 2020 period recorded subdued performance across the various real estate themes resulting from the tough operating environment as the economy grappled with effects of the Coronavirus pandemic.
In the retail sector, performance declined recording average rental yields of 6.7%, 0.3% points lower than the 7.0% recorded in 2019.
The subdued performance is largely attributed to: i) reduction in rental rates in a bid to attract tenants amid a tough economic environment which saw the rental rates in the sector post a 2.1% decline to Kshs 115.1 per SQFT in 2020, from Kshs 118.0 per SQFT in 2019, and, ii) reduced occupancy rates which declined by 0.7% points Y/Y from 77.3% in 2019 to 76.6% in 2020 attributable to reduced demand for physical retail space due to growing focus on e-commerce and scaling down of retailers in the wake of reduced revenue inflows.