Uchumi Supermarkets is shopping for an alternative location to move its Taj Shopping Mall outlet if the government makes good its warning to demolish the building to make way for the upgrade of Outering Road.
The retailer says it is in talks with a prospective landlord within the mall’s Embakasi locality to move its business there after the State declared that the mall is built on a road reserve.
The government on Thursday maintained that Taj Mall — which is estimated to be worth Sh5.4 billion — would be demolished as one of the plots on which it is built was acquired illegally.
Uchumi, which has a total of 37 branches, occupies a fifth of Taj Mall’s rental space. Its departure would deal a heavy blow to the mall’s owner at a time when occupancy is already down to 25 per cent.
“We are in talks with another (leasing) party but nothing has been finalised or signed,” said chief operations officer Willy Kimani in an interview.
Taj Mall, which was officially opened on August 1, 2011, by then vice-president Kalonzo Musyoka, signed a 10-year lease deal with Uchumi in November of that year.
This contract has now been complicated by the impending demolition, with Uchumi only awaiting the government’s action before seeking release from the lease.
“Uchumi signed a 10-year lease with us when the mall opened and it is meant to expire in November 2021. They (Uchumi) have not notified me of any intention to move from the mall,” said the Taj Mall proprietor Ramesh Gorasia.
Uchumi confirmed the Taj Mall lease period, adding that they would respect it and only move their goods from the shopping complex once an eviction order is given.
READ: Taj Mall risks Sh500m loan default in land row
Seven years ago, Nakumatt — the country’s biggest retailer by sales — suffered huge losses after a mall housing one of its outlets near Ruaraka was brought down to pave the way for construction of the Thika Highway.
“Our appeal to the government is that if they decide to proceed with the demolition, they should give tenants ample notice to relocate their businesses,” said Mr Kimani.
Taj Mall, which sits at the roundabout of Outering Road, North Airport Road and Airport South Road, has courted controversy since 2012 when the Kenya Urban Roads Authority said the building sits on public land.
The National Land Commission, acting on a request by the State road agency, revoked Taj Mall’s title deed on September 30 and ordered that the land be compulsorily acquired.
Chairman Mohamed Swazuri ruled that the mall sits on a parcel of land acquired by the colonial government in 1960 for the future expansion of Outering Road.
Acting Land secretary Fred Matiang’i last week added impetus to the government resolve, insisting that the mall was earmarked for demolition.
Mr Gorasia last week revealed that Taj Mall is at risk of defaulting on a $5 million (about Sh500 million) loan that is owed to Shelter Afrique.
“I am having a problem servicing my loan instalments. The threat of demolishing has scared businesses,” said Mr Gorasia.