The study report says completion of the Sh22 billion fully fledged Embakasi dry port will create new opportunities for JIT investments thereby helping manufacturers and retailers get goods at short notice.
JIT” are intelligent operations that help companies reduce the need for storage of huge amounts of raw materials in rented warehouses as well as helps industries process the right amount of products as demanded by the market.
Britam cautioned against ‘blind’ development of warehouses saying investors must first conduct feasibility studies to avoid a supply-demand mismatch.
A property investments and insurance firm anticipates a logistics’ hub development boom after the August 8 polls.
Financial services firm, Britam Asset Managers, says in its post-election outlook that Nairobi is likely to welcome multi-billion shilling investments as international logistic hubs operators continue to launch operations in the region. The report says specialised wares houses (Grade A warehouses) are the most sought- after properties by multinationals who are increasingly setting bases in Kenya.
So far, the 5,000-acre Tatu City property, 400-acre Tilisi Logistics Park and the 200-acre Infinity Industrial Park are the largest beneficiaries of the emerging trend where companies prefer to take up space Grade A or Just-In-Time (JIT) facilities located in less congested and accessible areas away from Nairobi’s Industrial Area.
“Quality warehouses remain scarce in the Kenyan market and this presents developers with an opportunity to undertake warehousing projects. Government initiatives to improve infrastructure is the greatest catalyst to the sector’s success”, it adds.
The study report says completion of the Sh22 billion fully fledged Embakasi dry port will create new opportunities for JIT investments thereby helping manufacturers and retailers get goods at short notice.
JIT” are intelligent operations that help companies reduce the need for storage of huge amounts of raw materials in rented warehouses as well as helps industries process the right amount of products as demanded by the market.
Britam said that logistics hub’s popularity would continue growing as companies shift from ownership of warehouses to concentrate on their core businesses of processing thereby reducing costs on staff and investments on warehouses they use once in a while.
It observed Imperial Health Sciences disposed its Sh2 billion storage facility to Mara Delta Property Holdings on a sale leaseback arrangement thereby releasing under-utilised capacity for leasing to other users.
The report observed that Embakasi dry port with a capacity to hold 450,000 containers created the need for industries to use JIT facilities to receive raw materials with exporters only releasing the ordered for cargo for export from contracted JIT facilities.
The move has seen most retail operators dispose of their transport fleet and lay off staff to reduce their operational costs for the services that could be leased when needed. The new facilities being developed in other counties also seek to cash in on establishment of special economic zones where multinationals have expressed interests in setting up operations. JIT facilities will also benefit most from upcoming malls that rely on them to stock their branches with goods across Kenya.
However, Britam cautioned against ‘blind’ development of warehouses saying investors must first conduct feasibility studies to avoid a supply-demand mismatch.
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