Companies

Alexander Forbes set to break ground on 20-floor Nairobi twin-tower in July

CEO

Alexander Forbes Kenya chief executive Sundeep Raichura. PHOTO | FILE

Alexander Forbes Retirement Fund is in July set to break ground on a 20-floor, twin-tower building in Westlands, Nairobi, to tap growing demand for office space in the area.

Regulatory filings show that the Sh1.84 billion tower will mostly house offices but will also offer retail and commercial rental space.

The office block follows similar developments in the area that has in recent years become a favourite for firms escaping the congested central business district (CBD).

“We are looking to break ground in July to August and expect the project to take about two years,” said the Alexander Forbes Kenya chief executive Sundeep Raichura in an interview.

The office block will be located at the junction of General Mathenge Drive and Peponi Road on a one-acre piece of land.

An environmental audit report submitted to the regulator shows that the project will be undertaken in two phases.

Phase one will see the development of a 13-storey tower consisting of commercial, retail and lobby space on four floors and offices on the remaining nine floors.

A four-storey commercial podium with retail and commercial space will also be part of this phase. Phase two includes the development of a 20-storey office tower with retail commercial space occupying the first four floors.

The facility will also have three basement levels providing 200 parking bays.

“The proposed project involves constructing an office block to meet the current demand for office space in Nairobi. High economic growth and increased population in Nairobi has led to rapid increase in demand for office spaces,” the report says.

“Westlands area is known to be home to a number of education, commercial and health institutions that require accommodation for their staff members.”

Mr Raichura said the project would be financed using the company’s internal cash.

The fund manager’s plans come at a time when there are indications that Nairobi could be hit by an office space glut, especially in Westlands and along Waiyaki Way.

A recent survey conducted by real estate firm MML showed that Waiyaki Way and Westlands accounted for 62 per cent of the total buildings approved in 2015.

With an average three years for construction, the firm says this area is likely to have an oversupply in the medium term.

“Worsening traffic congestion in many areas of town, notably the CBD, Upper Hill and Westlands, will drive demand for peripheral nodes with an increasing number of businesses making the decision to decentralise, taking many of their staff with them,” the firm said.

There are also those who hold, however, that there are not enough high-grade offices for discerning multinationals seeking to open shop in Kenya.