Muguku’s family Vs Shoprite On $4.88 million Waterfront Mall Debacle

Business
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Late billionaire Nelson Muguku’s family is seeking Sh520 million in lost rent from Africa’s biggest supermarket chain, Shoprite Holdings, after the retail chain cut short its operations at Karen’s Waterfront Mall.

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The late Nelson Muguku

Two companies under the Muguku empire - Crossroads Limited and Karen Waterfront Phase Two Limited – have gone to court to demand the payment, in US dollars, from Shoprite after the tenancy deal went sour.
Shoprite in April issued a three months’ notice to terminate its lease contract at the Waterfront Mall after it announced the closure of the Karen branch due to reduced flow of shoppers, ending the store’s less than a year operation at the high-end mall.
However, the Muguku firms argue that they still have a 10-year contract with Shoprite, and that the lease agreements did not provide for termination.
Daniel Muthanji Muguku, a director of the two firms, told the court that the mall had expectation of receiving rent for a decade.

Shoprite’s General Manager, Andrew Mweemba, has hit back at the Mugukus, informing the court that Waterfront had deceived the South African retail chain that the mall would have a mix of tenants - including banks, telcos, branded clothes outlets and ATMs – all of which would guarantee traffic to the supermarket. Shoprite also denied that it was the anchor tenant, arguing that its rival, Game Stores, had more strategic space at the mall, and, therefore, should be regarded as the premier resident.

http://api.traq.li/story/viewall3/8021/244300697:282385171,282220902,282220903,282385181,282385168,282385170,282385169,282385189,282385190,282385175?sig=f6f0d5a46505f6d30da02d973233dc028d0da77a803f2b47cab9ab2a26bdf127&order=0

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Waterfront Mall is not a financially viable location for a large retailer. I used to shop there. The traffic is not enough. Anyone living in Karen Brooks will tell you. Dead as a dodo.

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Wavunje vunje hio mall into mancave…
Na hustler waishi huko

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ShopRite kweli inaweza survive Kenyan market I don’t think so and hao wenye hio building wanatafuta easy money ati anchor tenant/lease manenos
Business is tough out there

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You know they could win the case if that’s what the lease agreement stipulates. Them stating now that they were not the anchor tenant while they could have indicated so before moving in is a way of them wiggling out of the deal.
What if Waterfront mall had lots of traffic and the mugukus were approached by say Carrefour to rent them out same space used by ShopRite. Would ShopRite have agreed? Obviously no, ShopRite would have quoted the lease agreement terms of how they had leased the place for 10yrs and any breach would have them compensated for the 10yrs loss of profit.
If the lease agreement was for 10yrs, then the mugukus will win this in court.shoprite is hurriedly exiting the Kenyan market but they don’t want to honour the agreements they signed as that would be too costly.

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I’ve never even seen that mall with my own two eyes. I don’t even know the approximate location

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Its near the Karen hardy junction from Karen shopping centre

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There is something about Southern African companies and East Africa. Let’s start with Game. Their store at Garden City is dead. Too much space devoted to non-essential items and little space for basic stuff like bread and milk. Shoprite also at Garden City is more vibrant than Game but very expensive and little variety. Another retailer is Choppies. The less said about them the better. I suspect they think it’s a walk in the park when setting up operations in these shores.

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What exactly are the assets owned by shoprite ile Mugukus can attach wakishinda kesi?

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the mall design is not shopper friendly, it looks like a fort hence attracting very little traffic compared to say galleria or the hub. Shoprite should have noticed the low traffic from the start and mugukus should have hired more experienced architects for the project.

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then the few food courts in the mall are damn expensive. add on the poor design

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True this is Kenya you have to get your priorities right uchumi was there then nakumatt then sadly romours of another giant coming soon

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Mkubwa, This was done by Planning Systems. Mumo and co… are messing this once vibrant Architectural firm.

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That’s their problem since they’re the ones who chose to do business with foreigners. They‘ll have to get a judgment then go register it in South Africa and attach their assets there. The court will not compel a defendant to post security unless there’s evidence that they are dissipating assets to avoid a judgment n

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Game brought their warehouse/diy model to Kenya. They have been shocked.
Kenyans expect foodstuff to take 80% of the space.
Kenyans don’t do diy because labour is cheap. I don’t personally know of anyone who owns a drill, unless he is a fundi.
Also how many Kenyans buy camping tents… Lol.
I wonder if they did any market research.

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I have no sympathies for any of these billionaires crying about their empty malls.
Juja City Mall, Waterfront, Unicity, Spur Mall etc.

If they had built a factory each, they would be wealthier and Kenyans would be rich enough to afford shopping in malls.

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Well, that’s why Lawyers are hired and paid to come up with contract loopholes. In this case, they will comb that contract for incidences not covered.

This will be a good starting point of unforeseen circumstances:

Coronavirus Is Battering Africa’s Growing Middle Class…From Kenya to Nigeria, South Africa to Rwanda, the pandemic is decimating the livelihoods of the once-stable workers who were helping to drive Africa’s economic expansion. As the coronavirus surges in many countries in Africa, it is threatening to push as many as 58 million people in the region into extreme poverty, experts at the World Bank say. But beyond the devastating consequences for the continent’s most vulnerable people, the pandemic is also whittling away at one of Africa’s signature achievements: the growth of its middle class.

https://www.kenyatalk.com/index.php?threads/how-coronavirus-is-battering-kenyas-growing-middle-class.156582/

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watoto wa muguku walifikiria pesa hupandwa kwa miti. wakadanganywa waweke pesa parking kwa mall, eti kila mwezi watakuwa wanavuna millions in rental income, na bado mjengo inapata capital gains pole pole. hawajui muguku alisweat kutafuta io mali. I thank God South Africans waliwatomba vizuri, na kuingia mitini.

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Remove Spur mall from that list. Moreover black manufacturers are not valued by the Kenyan govt. They see you as a tax ATM, instead of offering tax breaks. Aren’t payroll taxes enough, why would anyone become a manufacturer? On top of that the cost and reliability of energy isn’t where it needs to be.