South Africa fund to invest Sh3.5bn in local property
A worker arranges books at a warehouse. There are growing opportunities for warehouses and other industrial property in Nairobi and its satellite towns. PHOTO | FILE
South African-based Grand Towers Property Fund says it is looking to invest as much as Sh3.5 billion in local property. The fund said it will be putting up mixed developments mainly shopping malls and warehouses.
Part of the company’s strategy will be to develop property tailored for clients such as anchor tenants.
“We are looking for tenant-driven developments in the retail, commercial and industrial sectors with investment between $10m (Sh1 billion) and $35m (Sh3.5 billion),” chief executive Peter Collins told the Business Daily.
Grand Towers Property Fund investments in Kenya will boost its property portfolio which has mainly been focusing on shopping mall construction in Nigeria and South Africa.
The company did not indicate locations of interest or what returns they are looking at, but data from property consultants show that there are growing opportunities for warehouses and other industrial property in Nairobi and its satellite towns.
Some of the international companies that are investing in warehousing include South African-based Imperial Health Sciences, which begun constructing a $20 million (Sh2 billion) pharmaceutical storage and distribution facility along Mombasa Road, Nairobi County, in Mid-2014.
Logistics company Bollore Africa and developers Erdemann Properties and AMS Properties are also investing in industrial properties.
“New industrial areas are situated in Thika, Kikuyu and Ruiru towns which are on a positive growth curve attributable to improved infrastructure and government developments.
‘‘These towns cater for manufacturing companies and are currently attracting distribution and light manufacturing companies,” said a 2014-2015 report by property consultancy Broll Group.
The report added that the biggest demand for warehousing is expected to come from international retailers looking for storage space, adding that satellite towns are also preferable since land prices are cheaper than Nairobi.
Satellite towns are additionally being chosen since they are becoming more accessible due to the ongoing infrastructure development.
“The secondary and upcoming industrial areas are more strategically located in relation to the main arterial roads and/or the recently completed bypasses... they are easier to access,” said the report.
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