An illustration of the Garden City Mall. Photo/Courtesy
What you need to know:
The project on the Thika Superhighway has received all regulatory approvals from the Nema and the City Council of Nairobi.
About 40 per cent shop space has been booked in pre-let agreements, according to Actis East Africa MD Michael Turner.
The ground-breaking will set the stage for the opening of the mall by November 2014, with an expected 120 local and international retail brands.
Construction of Garden City Mall, tipped to be the region’s biggest shopping complex on completion, is set to start next month.
The project on the Thika Superhighway has received all regulatory approvals from the National Environment Management Authority (Nema) and the City Council of Nairobi.
About 40 per cent shop space has been booked in pre-let agreements, according to Actis East Africa managing director Michael Turner. Actis is the main financier and brains behind the project.
The project involves development of about 50,000 square metres of lettable retail space, 421 residential units for sale and 3.4 acres of serviced land for sale.
Actis is developing Garden City Mall on a 32-acre site that previously belonged to East African Breweries Limited nine kilometres from Nairobi’s central business district.
“The equipment is on site and piling will start shortly and ground breaking will be towards the end of July. We have received commitments from 40 tenants already, including the three anchor tenants in Nakumatt, Tile and Carpet and Game,” said Mr Turner.
The ground-breaking will set the stage for the opening of the mall by November 2014, with an expected 120 local and international retail brands.
The project is financed from the Actis Africa Real Estate 2 Fund, which held a final close of $278 million in 2012.The International Finance Corporation (IFC) also took a stake in the financing when announced it would inject Sh4.2 billion ($49.8 million).
“The total project cost is estimated at $205.4 million (Sh17.45 billion). The proposed IFC investment consists of an equity investment of up to $9.8 million and up to $40.0 million senior debt,” said IFC in its disclosure note published on May 8.
Mr Turner said Garden City will be structured into separate operating segments that will be sold separately, but each will hold interest in a central management entity on the development.
“Everybody who buys into the property will have a stake in the management entity so that the development does not fragment and to ensure that it is suitable managed,” said Mr Turner.
He added that the plan by the Nairobi Securities Exchange for Real Estate Investment Trusts (REITs) listing at the bourse means that the local market can now attract more investors in mega property development projects like Garden City because it removes a major hurdle in financing.
Treasury secretary Henry Rotich said last week that the law on REITs would be enacted through an amendment to the capital markets rules.
The development of a REITs segment would bring more liquidity into the sector, helping developers to raise money faster and efficiently, in turn accelerating the number of new houses coming to the market.
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