The shippers require the facilities for temporary storage before distribution or onward transit to neighbouring countries amid a growing interest in Kenya as a business hub.
The industry has lately witnessed a surge in investment activity as investors look to cash on untapped potential in the sector.
The funds will allow the firm to build warehousing developments and expand its operations across East Africa.
The warehousing industry in Kenya is registering peak demand from shippers, industry players have said.
The shippers require the facilities for temporary storage before distribution or onward transit to neighbouring countries amid a growing interest in Kenya as a business hub.
“Today, the growth of SMEs in Kenya has exploded and contributed to an increase in logistics services such as warehousing. In addition, a number of importers today have turned to utilisation of leased factors of production which are cheaper for retailers as opposed to the importer absorbing the cost and risk of running a non-core operation such as logistics while running the enterprise,” said Siginon Group managing director Meshack Kipturgo.
According to Mr Kipturgo Kenya’s unique geographical position has made it a key transit point for cargo destined for the local market as well as into the region.
The industry has lately witnessed a surge in investment activity as investors look to cash on untapped potential in the sector.
Last week Dutch PE firm DOB Equity said it will invest up to $4 million (Sh413 million) in Africa Logistics Properties Holding (ALP), a developer and manager of modern grade-A warehousing in Kenya.
The funds will allow the firm to build warehousing developments and expand its operations across East Africa.
DOB Equity will invest alongside CDC Group, the UK’s development finance institution and IFC, the private sector-focused global development institution and member of the World Bank Group.
Co-founder Maris, a diversified investment group operating across African frontier markets and Mbuyu Capital, the UK asset manager, will also be involved alongside other local and international investors.
DOB Equity said both international and local companies are constrained by a lack of modern, high quality and efficient warehousing across the region. A 2016 report by property services advisory firm Knight Frank showed that Nairobi lacks adequate logistics space to meet manufacturers’ demand.
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