Lockdown diaries: Capitalising on a captive clientele to survive the confinement

BY AAMERA JIWAJI

For as long as he can remember, Ibrahim Chitayi had wanted to own a restaurant. It was a dream that began watching his mother prepare meals for her small delivery business from their home kitchen in Mombasa.

In January 2020, it seemed that the fates were about to align. Chitayi had collected enough savings to start a restaurant without taking an interest-heavy loan from a bank. He had identified the perfect space to rent, and he had found a chef to prepare the Swahili-fusion meals that he wanted to develop a reputation for among Mtwapa and Shanzu residents.

But then the Covid pandemic hit and Kenya entered its first lockdown in March 2020 seemingly taking with it his dreams. Chitayi knew he would be hit hard as a new restaurant owner in the Coast province with lockdowns preventing travel by domestic tourists and restricting entry of international tourists.

Indeed, Kenya’s tourism sector was one of the most impacted in the country. Stakeholders in the entertainment industry, consisting of restaurant operators, taxi operators, and fresh produce suppliers, say that 30% of their colleagues have had to close their establishments as a result of the pandemic, which is equivalent to around 16,000 businesses.

It was fortunate then that Chitayi had not yet signed a lease or put down a deposit for a premise. It was also fortunate that his business plan was premised on running a business within his residential estate, a compound with 160 apartments. So he put the idea of a restaurant on hold, and instead opened Ibrachi Minimart within the estate’s business complex, which would stock daily essentials like any corner kiosk.

The dark cloud portended by the Covid lockdown turned into a silver lining for him. His minimart, safely ensconced within the estate’s boundaries became a go-to for the families that lived within the estate allowing him to benefit from a steady stream of customers even after a national curfew restricted movement on public roads.

The fast moving nature of the minimart business also worked in Chitayi’s favour. He set up contracts with suppliers to purchase items at retail prices, and by October 2020 he had recouped the initial investment into the business. When the space neighbouring the minimart was vacated, Chitayi rented it, made some renovations, and in December 2020, he opened Marhaba. His dreamof owning a restaurant was finally a reality.

Chitayi’s story is an uncommon one in a country where the hospitality industry has been hard hit by a series of lockdowns. Ahead of the Easter weekend, there were some signs of hope for a hospitality sector that had been limping along. But as Kenya heads into yet another lockdown at the end of March 2021, there are concerns that the curfew, which will likely be in place until mid-May restricting movement into and out of the provinces of Nairobi, Kajiado, Machakos, Kiambu, and Nakuru, will sound the death knell for many businesses in the sector.

While Ibrachi’s Minimart and Marhaba, Chitayi’s new restaurant, will benefit from the convenience of being located within an estate large enough to sustain the business at a time when movement is restricted, Chitayi’s decision to capitalize on a captive audience was made well before Covid hit the global economy. Residential estates, also known as gated communities, have steadily grown in popularity in Kenya because of the increased privacy and security they afford, and also for the convenient access to facilities and services for residents living within the housing complex.

Ibrahim Chitayi

The estate that Chitayi lives in is owned by the Kenya Medical Association (KMA), a parastatal affiliated with the Ministry of Health, and it caters to middle class families who work in Mtwapa or as far away as Mombasa and Kilifi. The business complex includes a swimming pool and a gym, in addition to Chitayi’s restaurant and minimart. Kevin Juma, manager of KMA’s Mtwapa estate said that the need to provide such facilities was especially important since the residential complex is a 10-minute drive from Mtwapa town.

KMA’s Mtwapa estate is just one in the parastatal’s property portfolio, and their most recent is the KMA Centre in Nairobi’s Upper Hill suburb offering both residential and office space. Residential property investments are a common investment by the pension schemes of Kenyan parastatals because the sector has steadily provided good returns. While the sector dipped in 2020 due to Covid, Cytonn Investments, an investment management firm with offices in Nairobi and Washington DC, spotlighted the continued appeal of lifestyle communities in their February 2021 report noting that at 7.7%, their returns were higher than the residential market average of 4.7%.

Similarly, Kenya Ports Authority’s Pension Scheme has a few properties dotted around the country, including Bandari Villas in Mombasa’s Bamburi area and a similarly named estate in Nairobi’s South C. In early 2020, they announced plans to put up an 11-floor residential property in Nairobi’s South C accommodating 198 families with an investment of Sh1.7b. Kenya Power’s Pension Fund has created a full brand to manage its real estate investments, Sakile Properties, with some high-end properties in Nairobi’s leafy suburbs of Runda, Loresho, and Karen.

In comparison to these more expensive lifestyle communities, the apartments in KMA’s Mtwapa estate are an affordable investment option with a sale price of Ksh7 million and a monthly rental of Ksh30, 000. It is no surprise that 95% of the apartments are rented with a few available for short-term lease, thereby capitalizing on the appeal of Mtwapa and Shanzu to upcountry vacationers.

Chitayi had hoped that the Easter long weekend would bring some of these families into his estate; his chef has some seafood specialities that he wanted to try out. With the latest lockdown, it doesn’t seem likely. But the earnings that Ibrachi’s Minimart and Marhaba are assured from the estate’s long-term residences will cover his overheads and when restrictions lift, he will be ready to welcome out-of-towners, and maybe even some international tourists. Sadly, that is a lot more than other businesses in the industry can hope for.

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