14 November 2017

Kenya: Troubled Nakumatt Faces Eviction From Garden City

Thika Superhighway-based Garden City Mall has joined the list of landlords seeking to evict struggling retailer Nakumatt from their premises.

GC Retail, which owns Garden City, has asked the High Court to allow it to repossess the space Nakumatt has occupied since May 2015 over unpaid rent, service charges and utilities amounting to Sh48.1 million.

The mall owners say Nakumatt has been in default since June 1, 2016.

The mall owner issued Nakumatt with a 30-day notice to leave the Garden City premises on October 6. GC Retail's eviction plans have however been hampered by Nakumatt's application to have an administrator run the retailer until it returns to stability.

Nakumatt is Garden City's anchor tenant.

"Since June 1, 2016, Nakumatt has been in default of its obligations to pay rent, service charges and utilities and the parties have been in discussions about remedying this situation. At present, Nakumatt has defaulted in payment of rent, service charges and utilities to the tune of Sh48,122,509.49 for the period between June 2016 and October 2017," GC Retail centre manager Edward Mugambi says.

"Nakumatt filed an application to place the company under administration, the legal effect of which was to prevent GC Retail from peaceably re-entering the premises without the court's permission as anticipated on expiry of the forfeiture notice," Mr Mugambi adds.

GC Retail claims Nakumatt's decline has affected traffic into the mall, which has in turn had an effect on other tenants.

Garden City claims that pedestrian traffic was on a 22 per cent monthly rise when Nakumatt was still afloat, and has now dropped to below a 10 per cent increase.

"The development directly and indirectly employs 2,000 people. GC Retail has received complaints from virtually all othe tenants in relation to significant losses suffered as a result of reduced footfall caused by Nakumatt's insolvency. Nakumatt is effectively a failed anchor tenant," Mr Mugambi says.

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