A Dubai-based investor has launched an ambitious plan to build a Sh5.52 billion towering complex in Nairobi comprising a shopping mall, office block and a hotel modelled on Singapore’s Iconic Marina Bay Sands Hotel.
Abcon International LLC, a real estate and drugs company, has teamed up with six local investors to develop the property on a 3.57 acre piece of land it acquired at a price of Sh650 million four years ago.
The 35-storey skyscraper will be located in the city’s commercial district of Upper Hill. The mixed-use development will also feature luxury apartments and an amphitheatre.
Kenya’s property market has boomed in recent years, catching the eye of deep-pocketed foreign developers from China, India, Britain and lately the United Arab Emirates.
Abcon and the local investors have sought approval from the National Environment Management Authority (Nema) to start construction through a consortium known as Greenfield Developers Ltd.
The multi-storied complex is set to cement the status of Upper Hill as a property investment hotspot, having attracted multiple local and international firms in the past decade.
The proposed 18-floor hotel will host a rooftop swimming pool that is modelled on Singapore’s Marina Bay Sands Hotel, according to Hass Consult, a Nairobi-based real estate firm that is managing the project.
Hass Consult is doubling as a shareholder in the Sh5.52 billion mixed-use commercial development.
Apartments will occupy 17 floors, office space 22 floors while 1,320 parking bays will sit on six basements and ground floor. Retail space will be located on the ground floor, and the first and second floors of the building whose location has a heavy human traffic expected to offer ready demand for businesses.
“It is going to be a landmark piece of architecture, whose cost estimates could rise,” said Sakina Hassanali, head of research and marketing at Hass Consult.
Commercial districts like Upper Hill and Westlands, on the peripheries of central Nairobi, are turning into big construction sites as investors eye handsome returns from demand for top grade office and retail space.
The shine on Kenya’s property market has in recent years pulled in multinationals in droves, especially Chinese firms that now dominate the sector.
Chinese investment firm Avic International is constructing a Sh9.6 billion complex in Westlands, comprising a 35-floor five-star hotel, apartments and 43-floor office blocks.
Avic last year also got approval from Nema to construct 110 luxury apartments in Nairobi’s Kilimani estate at a cost of Sh4 billion while China WuYi, another Chinese firm, is also busy in the Kenyan real estate market.
Indian tycoon Mukesh Ambani, who was last year ranked 37th richest man in the world, has a big presence in Kenya through his local company Delta Corporation East Africa. The firm has recently developed the Iconic Delta Corner twin towers in Westlands and another tower in Upper Hill which it sold to the World Bank.
The World Bank purchased Delta Centre from Mr Ambani to host its Kenyan offices at a cost of $22.8 million (Sh2.3 billion) while consultancy firm PwC bought one part of the Westlands tower.
Multi-billion shilling Garden City Mall, which opened its doors last year on Nairobi’s Thika Road, is owned by the British investment firm Actis.
The proposed complex in Upper Hill will be located next to Railway Golf Club at the junction between Haile Selassie Avenue and Lower Hill Road, close to the British High Commission.
Local investors are increasingly opting to create consortia involving foreign companies with financial muscle and expertise to take on mega projects.
Abcon is the largest shareholder of the Greenfield Developers Ltd consortium with a stake of 62.6 per cent, followed by a Kenyan firm, Signature Development Ltd at 18 per cent.
HassConsult has an 8.6 per cent shareholding, while businesswoman Elise Adan, the owner of Nairobi-based fashion company Tullia Ltd, has 2.6 per cent.
Ms Adan previously served as country managing director of Dubai-based Suzan Duty Free shops at Jomo Kenyatta International Airport in Nairobi.
Businessman Jayesh Saini, the chairman of controversial Clinix Healthcare, is yet another individual shareholder with 0.66 per cent stake.
Mr Saini was in the eye of a storm in 2012 after it emerged that Clinix directors had pocketed millions of shillings using ghost clinics to enrol civil servants in a medical scheme by the National Hospital Insurance Fund (NHIF).
Other shareholders of the consortium are Ilmi Investments Ltd and Bliss GVS Pharma Ltd.
The consortium bought the 3.57 acres of prime land at a cost of Sh650 million in 2012 from the Kenya Railways staff pension scheme.
It is located 500 metres away from the city centre and convenient for commuters– a factor that partly guides developers and tenants of office space.
The construction is set to create hundreds of jobs and demand for building materials. Upper Hill has emerged as a key commercial district attracting developers in droves owing to growing demand for office blocks from corporates, NGOs and State agencies which have been moving away from Nairobi’s central business district.
Britam, UAP, Equity Bank, CBA, KCB Bank, Coca-Cola and UAP are some of the firms that have offices in the area or are constructing skyscrapers for letting out space.
Real estate has for long been seen as a safe investment bet, making it among popular cash-generating options for companies in the local economy.
Centum Investment is putting final touches on its Two Rivers Development, a multi-billion shilling real estate project in Nairobi that is designed to host the largest shopping mall in the region.
Two Rivers, which comprises a shopping mall, hotel, office blocks and apartments, sits on a 102-acre piece of land on Limuru Road in Kenya’s capital city.
Global firms making their first entry into the region have booked space in the project, including French retailer Carrefour and Virgin Active, a platinum health club founded by billionaire Richard Branson.
The frenzied activity in the property market has, however, has stoked fears of a glut that could cool activity.
A real-estate tracker by financial services company Britam shows that there is an oversupply in retail space and big malls in Nairobi.
“Beyond the Two Rivers Mall expected to open by the end of this year, no further retail space will be required in Nairobi, as there will be oversupply,” Britam Asset Managers CEO Kenneth Kaniu said at a property investment summit early this month. Knight Frank and Cytonn Investments have also expressed concerns over a possible glut.