Uchumi Supermarkets is likely to lose its prime space at the Sarit Centre shopping complex in Nairobi after April following the expiration of its lease term.
The struggling retailer is negotiating with the landlord to have the lease period extended, but hopes remain dim.
Sarit Centre is building an extension that will include an additional 70,000 square feet space for its anchor tenant.
Uchumi, which currently occupies 40,000 square feet at Sarit, was given the first priority to take up the enlarged space, which will mean an increase in working capital.
“It is likely that we will not take that space because it is too big, it is not viable for us,” Uchumi’s chief operating officer Andrew Nixon said.
“If the negotiations to have the current lease extended do not work out this means that we will have to look for space in upcoming developments nearby or put more investment in the Westlands Mall branch.”
Sources indicate that French retailer Carrefour is interested in the Sarit space, having approached the landlord, Soma Properties.
Carrefour Kenya’s executive Franck Moreau declined to confirm the talks, but said the retailer is willing to expand whenever an opportunity arises.