Real estate is experiencing high productivity, and challenges are affecting the wholesale and retail sectors

True property has the highest workload efficiency in the services sector, according to a new report, even as the closure of some retail stores has strained the industry.

Kenya’s latest economic report shows tall Work efficiency in counties that have been divided into arid, semi-arid and non-ASAL (arid and semi-arid areas).

This is in contrast to the other subsectors: wholesale and retail trade, transportation and storage, information and communications, and professional and technical services.

Other sectors include administration and support services, public administration and defence, healthcare, financial services, education, and accommodation and food services.

This tall Work efficiency is directly dependent on technical skills related to the sector in which most employees work true property having a fourth skill level.

A report by the Kenya Institute for Public Policy Research and Analysis (Kippra) shows that almost half of the workers in true property this sector has a higher education.

“Several key economic sectors have a clear demand for skills at the third and fourth skill levels, indicating the importance of advanced skills. For example, nearly two-thirds of workers in professional, scientific and technical activities have a tertiary or higher education qualification; true property “The financial sector at 43.26 percent, financial and insurance activities at 37.73 percent, and indirectly measured financial intermediation services at 37.63 percent,” the report reads.

This result is inconsistent with the smaller number of employees this subsector has or will have in the future compared to wholesale and retail.

According to the report, while true property has the highest workload efficiency The services, wholesale and retail trade sector, a key indicator of growth for the former, recorded the lowest result.

The report shows true property a sector that covers the purchase, sale, rental and operation of real estate, whether owned or leased, and activities involving true property Agents employed 3,146 workers in 2023, while in wholesale and retail the figure was 132,192.

In 2024, 147,089 in the wholesale and retail sector and 3,500 in the retail sector true property.

“Work breakdown efficiency for the service sector showed that true property this sector had the highest employment rate efficiency “for all categories of counties” – we read in the report.

“In dry counties, the employment level is low true property sector in relation to production explains the higher cost of labor efficiency.”

Kippra explains that the result for true property the sector in the dry counties is mainly self-employed or leased true property in cities and urban centers.

“Wholesale and retail trade is characterized by the lowest labor costs efficiency “in all categories of counties, despite having the largest share of employment among the service sectors” – we read in the report.

True fortune Work efficiency in arid counties it is 48.44 percent, in semi-arid counties it ranges from 18.99 to 12.48 percent, and in counties not covered by the ASAL system it is 16.93 percent.

This true property The subsector grew by 7.3% in 2023 compared to 2.7% for wholesale and retail. The 7.3% increase is almost equal to the 7.0% increase for the entire services sector

According to the report, the decline in wholesale and retail sales also resulted in a decrease true property sector.

For example, in 2020, at the peak of the COVID-19 pandemic, the wholesale and retail subsector recorded negative growth of 0.4%, which also resulted in true property will fall to 4.1 percent annually compared to 6.7 percent in 2019.

In 2022, when Tuskys was at its most financially challenged and the auction house was in trouble, the wholesale and retail sector grew by 3.5 per cent, compared with eight per cent in 2021.

This year, true property grew by 4.5 percent from 6.7 percent the previous year. The Kippra report details how the closure of several retail stores in the country has had a negative impact true property growth.

The report indicated that in 2018, the total number of supermarket outlets was 257, but by 2023, closures, notably of Tuskys, Uchumi, Game Stores, Nakumatt, Choppies and Shoprite, had led to a significant decline in the number of outlets.

It documents that Tuskys closed 59 branches, Uchumi 35, Game Stores three, Nakumatt 65 and Choppies 15, while Shoprite closed four. As a result, the number of branches fell to 189 in 2022 and to 171 by December 2022.

“However, this number increased to 227 following the expansion of Naivas, Quickmart and Carrefour branches,” the report reads.

Naivas is now the largest retail chain in the country, with 105 branches nationwide that were previously occupied by locations run by competitors.

Kippra attributes the decline to financial turmoil and economic challenges (recurring losses), poor governance, changing consumer behavior toward online platforms (e-commerce), intense domestic and international competition, macroeconomic pressures (for example, tall The reasons for this were the negative impacts of the economy (e.g. high interest rates, high operating costs, slow revenue growth, and currency depreciation) and strategic mistakes such as over-expansion, poor inventory management, neglect of e-commerce, and poor supply chain management.

“This had far-reaching consequences for the retail market, true property sector and the economy,” explains Kippra.

The think tank says the closures have resulted in a significant number of workers losing their jobs, contributing to a rise in the number of unemployed people, which has had a major knock-on effect on individual incomes and consequently on consumer spending and overall economic growth. efficiency.

“The reduction in the number of retail outlets has affected true property retail market, with a drop in demand for retail space and warehouses. This could lead to a drop true property “Increasing investment profits, as well as falling rental income and reduced demand for both commercial services and property values,” the report reads.