Indian tycoon tightens grip on Kenya’s real estate market
Posted Sunday, October 30 2011 at 20:10
Indian tycoon Mukesh Ambani is deepening his foray into Kenya’s real estate market with a series of office and residential property developments that have already earned him an estimated Sh2.5 billion in profits, barely three years after his first investment in the country.
Mr Ambani, through Delta Corporation East Africa – a local subsidiary of his Indian conglomerate Reliance Industries – is currently constructing multi-billion shilling office towers in Nairobi’s Upper Hill and Westlands areas.
Delta Corporation East Africa is also developing a multi-million shilling residential estate in Athi River.
The 53-year old Indian business tycoon is believed to have pocketed Sh2.5 billion from two recent property deals, one of which was last month’s sale of Delta Centre to the World Bank.
Forbes Magazine has listed Mr Ambani as the world’s ninth wealthiest person with a personal fortune of $27 billion.
The multi-storied office tower that Mr Ambani sold to the World Bank is located in Nairobi’s Upper Hill area and is estimated to have cost Delta East Africa Sh960 million to develop, returning a profit of Sh1.24 billion after it was sold to the World Bank for Sh2.2 billion.
Ongoing sale of the Sh550 million Delta Plains estate in Athi River — comprising 153 residential units is estimated to have fetched Mr Ambani’s companies Sh548.8 million. He has so far sold houses worth a total of Sh1.2 billion with each unit selling at a price of Sh8 million.
Nilesh Shah, the executive director of Delta East Africa could not be reached for comment as his office and personal phones went un-answered.
Madabhushi Soundararajan, a director and former chief executive of Delta declined to comment on the company’s plans when contacted by Business Daily.
Multiple sources familiar with Delta East Africa’s plans say the Indian billionaire is betting big on Kenya’s real estate, and has projects worth an estimated Sh3.4 billion in the pipeline.
Teams Management Services (TMS), another wholly owned subsidiary of the Reliance Industries, is leading the design and construction of the multiple development projects, which have positioned the Ambani business empire to becoming a leading player in Nairobi’s real estate space.
Silvester Mutharia, the chief executive of TMS, said the design and approval of the new office blocks had been completed and actual construction was awaiting the nod from Delta.
Plans are at an advanced stage to start construction of a 16-storey Delta Chambers at a projected cost of Sh1.2 billion, and a 13-storey Delta Point commercial complex at a cost of Sh320 million. Both properties are located in Upper Hill area of Nairobi.
Real estate agents who talked to Business Daily estimated that up to 90 per cent of Delta Riverside Office Block, consisting of four blocks and developed at an estimated Sh320 million, has been sold.
Delta Corner, a 21-storey commercial office block in Westlands is almost ready for letting out.
Delta House, Ambani’s first property in Nairobi, is currently housing the government’s Commission on Implementation of the Constitution.