Listed financial services firm Britam has started construction of a Sh5 billion wind-powered commercial building in Upper Hill, Nairobi, that is expected to boost its rental income and drive diversification.
The firm broke ground for the development of the 30-storey building, which is expected to add into the market 350,000 square feet of office space for rent.
The projected completion date of the project is December 2015. A wind turbine that will power common areas of the building will be installed on top of the complex.
Rapid re-development of the Upper Hill area from a predominantly residential neighbourhood to a commercial hub has strained installed infrastructure like water and roads.
“This is our flagship project within the property development portfolio and it is driven by rigorous research that showed great need for Grade ‘A’ properties in Nairobi,” said Benson Wairegi (pictured), the Britam group managing director.
Mr Wairegi added that the financial services group was planning similar projects within the next five years.
Britam’s interest in property development has been attributed to the high returns offered by the segment and stability of the housing market, where demand outstrips supply especially in the residential segment.
BAAM, its asset management arm, announced in June plans to pool money from different investors that would be used to invest in real estate as part of a drive to diversify from government securities, equities, and bank deposits.
At that time, the company said that it would unveil a Sh10 billion property fund in a joint venture with international and local high net-worth investors pending regulatory approval.
The use of wind power in the office block marks a significant move for property development where sustainability and energy efficiency are central themes in the construction of modern buildings. Standard Chartered’s head offices in Westlands, CocaCola’s Nairobi offices, and a new office block within the United Nations headquarters in Gigiri are among the newest green buildings in Kenya.
Upper Hill has attracted dozens of multi-national companies and blue chip financial service firms seeking expansion space away from Nairobi’s city centre.
The One Group, an international hotel chain, has also announced plans to develop its building in the same area projected to host a five-star hotel, according to Ms Rose Muema, the director of planning at the City Council of Nairobi.
KCB’s staff retirement benefits scheme is investing Sh2.1 billion in the construction of another office block that will accommodate the bank’s new headquarters, also in Upper Hill area.
Commercial Bank of Africa, Old Mutual, and CIC Insurance also have their main offices in the business district.
Other firms which have set up base in the area include The World Bank, Citibank, PricewaterhouseCoopers, and The International Finance Corporation.
Britam was listed at the securities exchange last year through an initial public offering (IPO) that raised Sh3.5 billion out of the targeted amount of Sh5.8 billion.