When Iran-born entrepreneur Hamed Ehsani arrived in Kenya shortly after the 1979 Iranian Revolution, business was the last thing on his mind. Ehsani and his family were visiting his brother, a lecturer at the University of Nairobi, after which they planned to travel to Australia. Their Australian visas delayed, they fell in love with Kenya and decided to stay.
Today Ehsani is managing director of The Village Market, a large shopping centre located in Gigiri, one of Nairobi’s top neighbourhoods. The shopping centre neighbours the UN headquarters in Africa, the US embassy and a host of other diplomatic missions.
In 1992, as Ehsani and his brother Mehraz drove to a golf course through Gigiri, which he tells me was then under a coffee plantation, the idea of constructing a shopping and recreation facility in the area hit them.
Having grown up in the Middle East and studied in the US, Ehsani had been exposed to large shopping centres and malls, a concept that was fairly new in Kenya at the time.
“One of the arts of entrepreneurship is to see an idea and try and adapt it for a different environment,” said Ehsani.
“When we started there were one or two shopping centres already build, but they were very – I could say – rough. They met the requirements and they are still ongoing and they are doing beautifully well, but we felt there was room to add a little more style and a little more beauty and texture,” he recalled.
The Ehsani brothers instructed architects to come up with 30 shops and a small supermarket.
“We needed US$1.5 million to start the project. The land was bought at a very nominal cost. At that time it was cheap. We went out to a bank and we borrowed three quarters of that amount,” said Ehsani.
The Village Market has since expanded and now has 150 shops, and the 137-room luxury Tribe Hotel. The Village Market is currently under expansion that will see an additional 70 shops constructed. A $1.5 million budget hotel will also be established to capture increasing demand. According to Ehsani, this is the fifth expansion since the establishment of the shopping centre.
“The expansion is going to be quite large. It is a $50 million expansion to make room for retail brands. We have bookings and enquiries from European and American [companies],” said Ehsani.
Dealing with the sceptics
In 1992, not everyone was optimistic about the prospects of a shopping centre in a secluded, far-off part of town.
“We met huge resistance at the beginning and scepticism from many people; ‘this is not going to work, it’s too far, who is going to go there’ and all that,” said Ehasani. “People didn’t understand it. But, we could see that the area would grow. We kept at it, refined the concept and we expanded it. The whole idea was that we didn’t give up.”
When the US embassy came into the area, other diplomatic missions followed transforming the neighbourhood into a diplomatic zone. The Village Market became the ‘to go’ place for Nairobi’s diplomatic community, tourists and the middle class for high-end shopping and entertainment.
Demand for shopping centres on the rise
The Village Market managing director explained that external and internal forces are driving demand for more shopping malls in Nairobi and other urban centres in Kenya.
“Internally, the development of the middle class in Kenya has been a major force. Maybe about ten, fifteen years ago, out of an office of 20, only two of my staff drove a car. Today out of twenty, 18 have cars. It has completely changed,” he said. “With that mobility… now they can eat in different places, shop in different places, visit different people.”