Express breaks into real estate with Sh2bn project
An Express Kenya trailer. The logistics firm is now diversifying into real estate. PHOTO | FILE
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The project involves construction of 224 residential houses on 3.5 acres in four high rise blocks, with a mix of one, two and three-bedroom units.
Logistics firm Express Kenya will spend Sh2 billion to construct the first phase of its housing project in Nairobi’s Industrial Area as its diversification into real estate finally starts.
The firm said on Thursday that the first phase of the real estate plan that is expected to be completed in two years will see the construction of 224 residential houses on 3.5 acres in four high rise blocks, with a mix of one, two and three-bedroom units.
In total, the company plans to construct 1,200 residential houses on the land in Industrial Area, which measures 15.75 acres.
Express Kenya has been looking to diversify its business away from the mainstay logistics business, having seen a reversal in fortunes after losing the key EABL beer transport contract five years ago.
“We are targeting airport staff and other workers from Mombasa road who are currently being forced to go across town to get appropriate housing. The base price for the one bedroom unit is Sh8 million, for the two bedroom Sh12.5 million, three bedroom Sh14 million and the three bedroom with a servants quarter Sh16 million,” said Express Kenya senior manager in charge of project accounting Jane Nungari.
“We are financing the project through a mix of debt and our own internal finances, and it has also helped that we had the land which would otherwise have cost us Sh1.5 billion.”
The real estate plan was first mooted in October 2013 with ground breaking initially planned for July last year. Ms Nungari said however that legal and regulatory processes and approvals took longer than initially planned, pushing the start to this year.
The construction of the housing project will see Express Kenya join other listed firms such as Eveready Kenya and Car&General which have diversified into real estate to supplement earnings from their main business lines.
Express Kenya’s made a net loss of Sh23.27 million for the six months ended June 2015 compared to a profit of Sh10 million over a similar period in 2014, this after its turnover dropped to Sh60 million from Sh90.4 million between the two periods.
Eveready shut down its Nakuru battery factory in 2014 citing unfair competition from cheap imports, and proposed to put up on the 18.5 acres of land on which the factory sat either a shopping mall or a business park.
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