Global Cafe chain The Coffee Club is set to make its first entry into the East African market in Kenya. This follows the Australian franchise’s partnership with Luqman Petroleum, which will see it invest Kshs 646 mn (USD 5 mn) in the country. Coffee Club’s first store will be at Luqman’s branch in Lavington, one of the prime neighbourhoods in Nairobi County, and its opening is set for early 2025. 

‘’We are thrilled to announce our partnership with Luqman Petroleum as we bring the Coffee Club to East Africa. This marks a significant milestone in the Coffee Club’s expansion journey, and we couldn’t envision a better partner to lead the way in Kenya, Tanzania, and Uganda.’’ Charl Badenhorst, The Coffe Club Chief Executive said. 

The cafe group currently has approx. 400 outlets in 13 countries including Australia (mother country), New Zealand, Thailand, and the Middle East among others, whereas it aims to open more branches in the East, West, and Central African markets. 

Coffee Club’s deal with Luqman underscores one of the existing retail investment trends in the country, with various retailers particularly fast foods and pharmaceuticals partnering with oil companies to further their growth. This is attributed to the presence of traffic and strategic locations targeting mostly travellers and online shoppers, while also serving as convenience stores to neighbours. Sample peer restaurant chains that have adopted this include Java, Subway, and KFC, among others, who have partnered with Total, V-Power, Rubis, and National Oil stations among others.

In terms of the overall market performance, the Nairobi Metropolitan Area (NMA) retail sector has been relatively neutral and stable over the past two years. Rental yields averaged 8.2% as of Q3:2024, as retailers engage in an expansion spree consequently curbing the oversupply of space. Interestingly, Coffee’s choice of location in Nairobi’s affluent neighbourhood poses yields above the market average at over 9%. This is influenced by the presence of middle and high-networth individuals with disposable income, the presence of quality space, and the growing demand for quality services, which we expect to drive and support the Club’s venture.

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