The wide, open retail floors that once filled commercial buildings in Nairobi’s central business district are disappearing.
In their place, shops are being carved into smaller units, some barely wide enough for a counter and a wall of shelves. In some buildings, single rooms are split into neat rows of cubicles, each occupied by a different vendor, their goods stacked carefully to maximise visibility.
In one such building, a cosmetics seller operates from what looks like a walk-in closet, just enough space for a chair, a mirror and layered shelves of skincare products. A few doors down, a phone dealer works from a glass display unit holding only a handful of devices.
Even established electronics brands are adopting the same approach, setting up sleek, minimalist display points in prime locations while keeping bulk stock in cheaper warehouses outside the city.
At the centre of this transformation is the growing popularity of partitioned retail spaces. Here, a single shop is divided into dozens, sometimes hundreds, of rentable shelves.
Yvonne Gitonga, an entrepreneur, has built a business targeting small and online sellers who want a physical presence without the cost of a full shop.
“I run a business that supports small start-ups, especially those operating online. We take a shop, partition it into different shelf sizes, then rent them out to those who cannot afford a full store,” she says.
Her model blends digital and physical retail, offering a solution in an era where many businesses begin online but still need visibility.
Yvonne launched her first outlet in 2024 at Kimathi House. Two years later, she opened a second location at Simara Mall, still in the CBD. Both spaces maintain high occupancy rates.
“At Kimathi House, we have about 90 shelves, while in Simara Mall we have140. Prices vary depending on size. Small open shelves range from Sh1,500 to Sh2,500 per month, and lockers go for about Sh4,000,” she explains.
Her idea was born out of personal experience.
Business shops along Kimathi Street in Nairobi experience a low customer turnout during the Easter Eve celebrations on April 19, 2025.
Photo credit: File | Nation Media Group
“I had an online business and was renting a shelf. As I grew, I needed more space, but I realised I wasn’t getting many walk-in customers because most preferred deliveries. That’s when I thought of creating a shared space for small online businesses.”
The model thrives on visibility and cross-selling. A customer visiting one vendor can easily browse and purchase from others, thanks to the open display setup.
“We target people who complete sales online but need a pick-up point. . Prices range from Sh2,000 to Sh5,000 depending on size,” she says.
Delicate balance
For traders like Cynthia Wanjiku, small retail spaces are not just a trend but a daily reality.
She operates from a compact unit on the ground floor of Superior Centre along Kimathi Street, paying nearly Sh50,000 a month.
“I find it manageable given the location and the foot traffic. I sell beauty products, jewellery and fragrances, so I arrange everything carefully to fit and remain visible,” she says.
Her shop functions more as a curated display than a traditional store. Each shelf is optimised to showcase high-demand items, allowing customers to browse quickly and make decisions on the spot.
Location remains critical. Being on the ground floor gives her access to walk-in customers, including those who had no plans to buy.
Like many small traders, Cynthia is balancing the cost of physical presence with the reach of online sales. A smaller unit allows her to maintain a CBD address without the heavy overheads associated with larger spaces.
Building trust
For Diana Wakhungu, who runs an online import business, having a physical location is still essential for building trust.
“When starting a business, renting a full shop is not always practical. We looked for a space within our budget. Even though we sell online, customers want a place where they can pick items or verify products,” she says.
Her setup combines storage and display.
“I pay about Sh8,000 for storage since we import goods, Sh2,500 for display shelves, and another Sh2,000 for clothing space,” she explains.
She began renting shelves in January 2025, the same month she launched her business, and says the model has proven efficient.
“I plan to expand to a larger space over time," she says.
Diana Wakhungu, entrepreneur and owner of Brinaxh Luxe imports.
Photo credit: Pool
Rise of micro retail spaces
The rise of micro retail spaces is also disrupting long-standing practices in the property market, including the concept of goodwill.
Traditionally, securing a prime retail space required paying goodwill, a lump sum paid up front, separate from rent and deposit. It represented the intangible value of an existing business, such as its customer base, reputation and location.
Today, that model is fading. Joseph Karuga, a property agent at Premise Realty, says the change began about five years ago, driven largely by the growth of online businesses.
“We started seeing demand for smaller spaces with the rise of social media. Many businesses no longer need large shops. You can operate from a small space and run the rest online,” he says.
As business models evolved, goodwill lost its meaning.
“It was supposed to reflect the value of a going concern with existing clients, but it was abused. People ended up paying millions just to access space,” he explains.
Now, many landlords are doing away with goodwill altogether.
“Today, you just pay the standard charges and take up the space.”
From a landlord’s perspective, smaller units are also more practical.
“It is easier to lease small spaces. Large units can stay vacant for long, which means lost income. By subdividing, landlords attract more tenants and reduce vacancy rates,” Karuga says.
Typical small shops now measure between 30 and 50 square metres, renting for about Sh40,000 to Sh50,000. Most of these were not originally designed to be this size but have been adapted to meet changing demand.
“Landlords are responding to digital marketing trends. New developments are now being designed with smaller retail units because uptake is faster,” he adds.
The trend is not limited to small traders. Larger brands are also embracing compact spaces, using them primarily as marketing points to maintain visibility in high-traffic areas.
Despite the growth of e-commerce, physical retail spaces remain relevant, but their role has changed.
Older buildings are being reconfigured, while new developments are embracing the concept from the outset. Some spaces are even being repurposed into shared offices, entertainment hubs or serviced workstations for entrepreneurs.
According to a Knight Frank market report, more than 570,000 square feet of mini mall space is expected to come up between 2025 and 2027, signalling sustained demand for smaller, more flexible retail environments.
