South African investment firm Stanlib is increasing its investment in Kenya’s property sector with the planned construction of a Sh1.2 billion shopping mall in Athi River town.
The development will come up on the Nairobi-Namanga road, off Mombasa Road, about 30 kilometres from the city centre.
The proposed shopping mall will be the first disclosed Kenyan investment from the $150 million (Sh15 billion) fund that Stanlib raised in mid-2013.
South African investment firm Stanlib is increasing its investment in Kenya’s property sector with the planned construction of a Sh1.2 billion shopping mall in Athi River town, which is just outside Nairobi.
Stanlib, through its Africa Direct Property Development Fund, is set to construct a mixed development that will have the shopping mall and offices in the satellite town.
The development will come up on the Nairobi-Namanga road, off Mombasa Road, about 30 kilometres from the city centre.
“The proposed mixed use development of Athi River Mall will comprise retail and commercial buildings consisting of anchor, fashion, financial, food/restaurants, furniture, electronics, health and beauty, line shops, children entertainment, modern offices and other services. The mall will consist of a basement, ground floor, first floor and a roof top,” says the project’s Environmental Impact Assessment (EIA) report.
“The retail section will have 127 units covering a total area of 20,797.95 square metres that will be constructed in two phases. Phase one will involve the construction of 83 retail units, with an area of 12,973.42 square metres while phase two will involve the construction of 44 retail units, with an area of 7824.53 square metres,” adds the EIA report.
The proposed shopping mall will be the first disclosed Kenyan investment from the $150 million (Sh15 billion) fund that Stanlib raised in mid-2013.
At the time Stanlib said that it would develop two shopping malls, one in Nairobi and another in a satellite town.
The EIA report did not indicate when construction would begin but typically such developments take at least 24 months. Stanlib, the asset management arm of South Africa’s Liberty Group, has also invested in Kenya’s first real estate investment trust (Reit).
Stanlib’s Fahari Income-Reit managed to raise Sh3.6 billion through an initial public offer (IPO) and has since bought Greenspan Mall in Embakasi, Nairobi County for Sh2 billion.
Buffalo Mall in Naivasha, Nakuru County is another retail property that has been partly acquired by South Africa’s Pivotal Fund which bought a 50-per cent stake for Sh450 million. Increased spending power, devolution coupled with rapid urbanisation are factors that are driving mall development.
“While much of Kenya’s formal retail capacity is concentrated in central Nairobi and the port city of Mombasa, there has been growing development of formal space in cities such as Kisumu and Eldoret in recent years, with potential for even wider diversification in the future.
“This is being driven in large part by the devolution process, which has led to higher incomes in counties outside the capital, and consequently to a significant increase in investor interest in developing retail centres in these areas,” said a report by Oxford Business Group.
The report found that Kenya’s formal retail sector accounts for between 30 and 40 per cent of the market, behind South Africa, which has a penetration rate of 60 per cent. UK’s Old Mutual Group, which traces its origin to South Africa, has also invested in Kenya’s retail market with the recent acquisition of a 50 per cent stake in the Two Rivers Mall that is coming up in the upmarket Runda suburb of Nairobi.
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