By  on January 3, 2014

NAIROBI, Kenya — The work at the luxury Kempinski Hotel hereis in full swing. Four stores are being built in the annex, which iscalled Galleria. To foreigners, the annex may look modest, but inKenya’s capital city, it is a real plunge into unknown, the firstattempt to form a space fully dedicated to luxury retail.

“We aretrying to create a classic look for the entire area,” said EstherMoturi, guest relations manager at the Villa Rosa Kempinski Hotel. “Itwill be the first luxury corner in the entire city of Nairobi, ideallywith at least four brand new boutiques.”

As she speaks, securitypersonnel are taking over the lobby, which has been seasonally decoratedwith a Christmas tree and striking white-blue lights. The president ofSri Lanka, Mahinda Rajapaksa, and his wife are returning to their suiteat the hotel.

Nairobi is the diplomatic, intelligence and mediaheart for all of East Africa. The city has a huge United Nationscompound and is where countless banks, trading companies andnongovernmental organizations have been opening offices for decades.Nairobi’s Jomo Kenyatta International Airport is the busiest one in EastAfrica.

The city is awash with both “clean” money from trade andinternational agencies and expatriates and “dirty” money, cash flowthat is pouring here from the entire region, mostly brought in bycorrupt East and Central African officials and illegal traders on theirperiodic outings or on shopping sprees.

Nairobi has also becomethe temporary home for hundreds of thousands of relatively wealthyrefugees from Somalia and the Democratic Republic of the Congo, twocountries devastated for decades by civil wars.

Surprisingly,given its wealth, the city still does not have any large luxury malls orother shopping centers, not even ones similar to those that can befound in African metropolises like Cairo, Johannesburg and Cape Town.

“Theshopping in Nairobi is limited to the essential, though the choice hasbeen widening over the past two years,” said Yayoi Segi, a Japaneseeducation specialist in a U.N. organization, who is based in Nairobi.“For clothes and cosmetics, there is really no trusted shop that sellsquality products and brands. Most of my colleagues still do theirshopping in Europe and Asia. Also, the prices here are higher and thereare many counterfeits. One can’t really talk about ‘shopping experience’in Nairobi.…Not yet.”

The attempt to improve the shoppingexperience in Nairobi comes even as the city is still recovering fromthe terrorist attack at the Westgate mall last September that killed 67people. Four people were charged in the attack, which was carried out bythe Somalia-based terrorist organization Al-Shabaab that is linked toal-Qaeda. The mall was burnt down during the attack and the siege thatfollowed.

While the Westgate was a magnet for expatriates livingin Nairobi for its chic cafés, its stores were mainly local fashionshops, and the neighborhood surrounding it was filled with down-marketstores and restaurants. Therefore, Hotel Kempinski and its tiny Galleriawill be the first ones to offer a dedicated luxury shopping experience.

“Luxuryshops have to be in an elegant and enclosed area,” said Aziz Fazal,director of the Little Red Unmistakably boutique located at Yaya Center,on Argwings Kodhek Road, the store that for some time has been sellingdesigner clothes by Hugo Boss, Giorgio Armani and Ermenegildo Zegna.Little Red Unmistakably will be one of those four pioneer stores soonmoving to the Galleria.

While the Galleria is clearly a vanguardvenue, there are other luxury shopping malls and centers underconstruction throughout Nairobi. The biggest of them will be calledGarden City and is being built on Thika Road, with a shopping mall ofabout 500,000 square feet and a sizable entertainment area. The mall isexpected to attract international fashion brands that currently areconcentrated in several South African stores. The developers of GardenCity are promising to serve all of East Africa — especially, of course,its upper-class clientele. The mall should open for Christmas shoppingat the end of 2014.

Then there is “Two Rivers,” which is beingconstructed in one of the most upmarket neighborhoods of Nairobi. Thedeveloper, the Centum Investment Group, claims that “Two Rivers will be100 acres of prime property located in the Runda/Gigiri area alongLimuru Road within the highly sought-after diplomatic blue zone inNairobi.” The site is expected to contain 505,000 square feet of retail,entertainment and lifestyle offerings; office parks; hotels, andapartments, and eventually to cover 8.9 million square feet.

Fazalcan hardly contain his excitement about the project. “There will be aluxury floor. At least 600 square meters [6,400 square feet] of luxuryretail is in discussion. There will be plenty of luxury stores.…Andseveral top architects from all over the world are already making surethat this will be a real luxury place; elegant, full of marble and otherexpensive materials.”

The new Nairobi malls will be a sharpdeparture from the city’s current high-end stores, like those at YayaCenter, one of the few present-day upmarket outlets of Nairobi. Theseare all multibrand stores. And Segi and other professionals based inNairobi are cautious about any impending luxury boom in the city.

“Yes,there are a few new malls coming up, and it appears that big brandswould finally arrive,” she said. “But based on our experience here, thegoods could remain much more expensive in Nairobi than abroad, and thosewho are frequently traveling will continue shopping in Paris or Tokyo.”

Inaddition, even as luxury brands increasingly eye Nairobi and otherAfrican markets, worries remain over a continent continually wracked byturmoil, from Egypt to South Sudan. In Nairobi itself, there have beennumerous terrorist attacks over the last few years, including a grenadeattack on the bus terminal, and the terrorist assault on the Westgateshopping center. The arrival building at Nairobi’s international airportmysteriously burned down in August. Security is extremely tight, andinvestor confidence is dropping. Some analysts believe that the countrymay even start experiencing negative economic growth.

Againstthat backdrop, Nairobi will remain the “servicing center” for all ofEast Africa, primarily because its infrastructure is significantlybetter than any other city’s in the region. The Kenyan capital’sposition received a further boost a few weeks ago when Chineseconstruction companies began work on an enormous project that eventuallywill connect all of East Africa — including Ethiopia, Uganda, SouthSudan, the Democratic Republic of the Congo, Rwanda and Burundi — withthe Kenyan ports of Mombasa and Lamu. Most of the links will go throughNairobi, where new roads, a new city railway and a new airport terminalare being built.

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