Mini Bakeries launches Sh3.5 billion real estate plan

Mini Bakeries has ventured into real estate with plans to build a Sh3.5 billion residential estate off Kamiti Road in Kiambu County.

The maker of Supa Loaf bread is seeking to exploit the growing demand for housing in Nairobi metropolis and cut reliance on revenue from bread.

The family-owned food company plans to develop and offer for sale a total of 349 maisonettes consisting of 178 three bedroom semi-detached houses and 171 four bedroom detached houses.

The gated community is set on what was formerly a coffee plantation and marks Mini Bakeries’ first entry into the lucrative housing market.

Mini Bakeries said it is set to break ground for the multi-billion shilling project by end of June and is currently awaiting approval of the building plan by the county government.

“There has been a rapid increase in the number of people moving to the urban areas in search of employment, health, education and other social services which has led to an increase in demand for social services including housing,” said Mini Bakeries its filings to the National Environment Management Authority (Nema).

“It is against this backdrop that the project proponent has decided to establish the mega project. Demand for houses for residential and office houses has been rising steadily.”

Nahashon Oketch, manager in charge of the development, said the project was due to start in April but had to be put off to await approvals from the devolved government.

“The maisonettes will be for sale and this is Mini Bakeries’ first housing project,” said Mr Oketch in an interview with the Business Daily.

The high-end residential project features a large shopping centre and a sewer treatment plant that will serve the community expected to have a population of about 2,000.

The development’s environment impact assessment was approved by Nema last year. Mini Bakeries joins a growing list of publicly listed and private firms which are turning to real estate to create new income streams, diversify revenue and grow profitability.

The building and construction sector expanded by 5.5 per cent last year up from 4.8 per cent registered in 2012, highlighting investors’ increased interest in real estate.

“Investments in the construction industry is likely to remain robust against a background of stable interest rates coupled with the on-going government infrastructure projects and the private sector’s resilient participation, especially in the real estate development,” reads the Economic Survey 2014.

Mini Bakeries was founded in 1983 in Mombasa and has 40 manufacturing units in Kenya, Uganda and Tanzania producing a variety of bread including sandwich, cylindrical under the Supa Loaf brand.

A report by TDF Advertising says that Supa Loaf enjoys 51 per cent market share in Kenya, ranking it ahead of rivals such as Kenblest, Festive, Elliots, United and Broadways.

Mini Bakeries sells about two billion slices of Supa Loaf or 110 million loaves of bread every year, potentially putting its annual revenue at over Sh4.4 billion.