Capital Markets

Centum plans Sh60bn homes project

Centum Chief Executive James Mworia. Photo/FILE
Centum Chief Executive James Mworia. Photo/FILE 

Listed investment firm Centum plans to put up a Sh60 billion mixed-use real estate project on its 100-acre piece of land in Runda.

The move signals a major break into the lucrative property sector and the establishment of one of Kenya’s single largest such investment.

The investment firm intends to develop homes, office blocks, a five-star hotel, and a commercial centre targeting high income earners and members of the diplomatic community whose members are the predominant residents in adjacent estates.

Public scrutiny

“Centum’s objective is to uplift the value of land in a relatively short time by investing in master planning and urban design process that enhances the quality of development,” said the firm in its application seeking the National Environment Management Authority’s approval.

GAPP Architects and Urban Designers, a South African firm contracted to plan the project on the parcel of land along Limuru Road, has submitted its report with the project now awaiting public scrutiny before approval by Nema.

The multi-billion real estate project will be developed by Runda Closeburn, a wholly-owned subsidiary of Centum formed in 2010.

The land was bought from the Koinange family at “more than Sh1 billion”.

Centum’s entry into the real estate sector was aimed at reducing the firm’s exposure to the stock market whose performance is highly volatile, while investment in property has reported steady gains since 2001.

Centum slashed its total investment in the stock market to nine per cent, down from 24 per cent a year earlier, in the first half of the current financial year ending September 2011.

Apart from the Nairobi project, the investment firm is developing a similar project on the outskirts of the Ugandan capital Kampala, also targeting the top end of the market and expatriate workers.

Through the twin projects, the investment firm will be eyeing attractive capital gains in the housing sector in both countries where demand is running behind supply.

Last year James Mworia, chief executive at Centum, announced that the firm was seeking local and international investors to buy into the multi-billion project that is envisaged to provide a live-work-play environment.

He had also disclosed talks with several foreign missions to use portions of the land to put up homes for embassy staff.

It was, however, not immediately possible to establish if the firm had netted the targeted investors or foreign missions. Mr Mworia said that investors would provide funds for the project that could later be listed at the stock exchange under real estate investment trusts (REITs).

Investment vehicle

The Capital Markets Authority is developing regulations to allow the setting up of real estate investment trusts, where the first such investment vehicle is expected to be listed at the Nairobi Securities Exchange by June this year, according to Ms Stella Kilonzo, the chief executive at the regulatory body.

Centum’s entry into the real estate sector, which involves acquiring and master-planning land before selling it to investors in smaller portions depending on the desired development, has been replicated in several other mega-housing projects.

Migaa Golf Estate, which sits on 776 acres in Kiambu and the 1000-acre Illuluwe Estate adjacent to the Konza ICT City, are among prominent examples where buyers acquire master-planned and serviced land.