Markets & Finance

Actis takes bank loan for Garden City mall

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Ongoing construction of Garden City mall on Thika superhighway. FILE

Private equity firm Actis has opted for a commercial bank loan to partly finance construction of the Garden City shopping mall instead of tapping a credit line offered by the World Bank’s private investment arm, the International Finance Corporation (IFC).

IFC will now only hold an equity stake of Sh600 million ($7 million) in the development along Thika Superhighway, expected to be East Africa’s biggest shopping complex.

The equity investment will give Actis a stake of less than 10 per cent in the Garden City Mall. IFC and Actis were in negotiations for a Sh4.1 billion ($49.8 million) financing deal in the form of loan and equity stakes.

READ: IFC to inject Sh4bn in Thika Road shopping mall

“The IFC debt financing that was proposed for this project was sourced from a commercial bank, so the sponsor (Actis) did not pursue this part of the proposal with IFC,” said IFC in an e-mail response to the Business Daily.

Last week the Garden City project secured a total equity investment of $32 million, with London-based CDC Group injecting Sh2.1 billion ($25 million).

IFC is an investor in Actis’ Africa Real Estate Fund II which is also involved in the project giving it an indirect investment in the Thika Road complex.

The five-year project being set up on a 32-acre piece of land purchased from EABL in 2011 is valued at Sh21 billion. It is expected to create more than 650 jobs during the construction phase and over 800 more once completed.

The shopping complex will include 33,000 square metres of retail space and 76 residential units with phase one expected to be finished by end year.