Real estate boom creates new crop of Kenya property barons

Patrick Mweheire, the Renaissance Capital Kenya chief executive said in an interview on Wednesday the Russian investment Bank acquired through Waguthu Holdings at least 300 acres of the 487 acres of Eaagads’ “Tatu” coffee estate.

“We bought the whole stake that was previously held by Socfinaf for purposes of developing Tatu City,” said Mr Mweheire.

Mr Mwagiru is known in social circles as a prominent Kiambu coffee farmer and director of Waguthu Farmers Ltd.

Details of the transaction, including valuation of Eaagads’ shares remained scanty and Eaagads managing director, Fabian Philipart, declined to comment on this story. 

The Eaagads stock has been one of the highest gainers in the past 12 months, going up by about 140 per cent to the current price of Sh48.

The share at one time touched a high of Sh75 following announcement of the deal.

The purchase of 9.9 million shares of Eaagads is however estimated to have cost Renaissance in excess of Sh200 million going by the prevailing market price of the stock of Sh20 per share at the time.

With an acre of land in Kiambu area costing at least Sh4 million, it must have cost Renaissance at least Sh1.2 billion to acquire the land from Eaagads.

Buying shares

“By buying shares in Eaagads Renaissance made a kill, it would have cost them a whole lot more to buy the land they acquired,” said the source who was involved in structuring the transaction.

Eaagads’ shift towards property development from coffee farming appears to have found minority investors by surprise, with some claiming exclusion from the company’s dealings.

One of the minority investors who owns close to 1.5 per cent of the 16 million shares in the company says that he is not aware about the shift towards real estate sector, despite being a top player in Kenya’s capital markets.

“We small shareholders are not aware of what is going in the company, I am totally shocked that Tatu City will be built on our coffee plantations,” said the shareholder who requested anonymity saying he will raise the issue at the company’s annual general meeting.

Among the other shareholders in the company are Mrs Viviene Rogerson and Mrs Arbella Illingworth who each owns 11.08 per cent, as per the end of the 2009 financial year.