Actis starts construction of Sh1.8bn Nairobi office block

What you need to know:

Actis will expand Nairobi Business Park in partnership with Mentor Management, a property development and management firm in which the PE firm holds a controlling stake.
While Cactic, the Chinese firm contracted to upgrade Jomo Kenyatta International Airport, will be the main construction firm.

Private equity (PE) firm Actis on Tuesday started the construction of five new office blocks in Nairobi at a cost of Sh1.8 billion, deepening its investment in the real estate market.

The development is an expansion of the Nairobi Business Park Actis launched in 2004, with the new office blocks set to be completed next year adding 15,000 square metres of office space.

Actis joins a number of foreign investors including Russia’s Renaissance Capital that are pouring billions of shillings into real estate to ride a housing boom fuelled by a growing middle class.

“Demand for grade A space continues to grow in Nairobi and we have seen demand in this location,” said Micheal Turner, Actis managing director for East Africa, during the ground breaking ceremony on Ngong Road.

The development will host banking halls, conference centre, dry cleaners, cafes, fitness centre and a pharmacy. Retail chain Chandarana is keen on letting space in the facility.

The expansion of the park is the last project for Actis’ Africa Real Estate 1, which raised Sh13 billion and was used to construct commercial properties in its six years of existence including the Junction shopping mall and phase one of the Nairobi Business Park.

The PE fund has already raised $278 million (Sh23.3billion) under Actis Africa Real Estate 2 that will focus on retail and office development in east, west and southern Africa, excluding South Africa.

This will be used to build a Sh12.4 billion housing project in Kenya , dubbed Garden City, in quarter on a 32-acre piece of land in Thika.