The family of the late Nelson Muguku, the poultry farmer who made billions as a top shareholder at Equity Bank, is deepening its presence in the lucrative real estate market with the planned construction of a multi-billion-shilling complex in Nairobi’s upmarket Karen estate.
Phase one of the project dubbed Karen Waterfront will cost Sh2.6 billion and people familiar with the plan said construction of the last two could raise the cost to Sh10 billion.
It will sit on a 50-acre piece of land located in the Karen Triangle (the area enclosed between Karen Road, Karen Lane and Lang’ata Road), making it one of Kenya’s largest pieces of real estate on the cards.
Work on the mega project is expected to kick off with the construction of a two-storey shopping mall with 25,000 square metres of leasable space overlooking a 3.5-acre man-made lake.
“The Karen Waterfront is a mixed use development... in response to the growing demand for high quality retail, commercial, and residential facilities,” sponsors of the project say in regulatory filings seen by the Business Daily.
“It shall be developed in different phases organised around a 3.5-acre man-made lake… encircled by a landscaped boulevard as well as by extensive high-end residential apartments, retail space and offices.”
Mr Muguku, who died in 2010 aged 78, built a multi-billion-shilling business empire from humble beginnings as a poultry farmer based in Kikuyu on the outskirts of Nairobi.
At the time of his death, his estate was valued at approximately Sh10 billion, mainly generated from Muguku Poultry Farm, a modern hatchery, and his stake at Equity Bank where he was among the top shareholders whose wealth multiplied rapidly following the lender’s listing at the Nairobi Securities Exchange (NSE).
Mr Muguku quit his teaching job in 1957 when the poultry business he started with two hens and a cock to supply eggs for breakfast in 1956 picked up.
Leah Wanjiku, the late businessman’s wife, similarly left her teaching career in 1967 to help out on the farm.
Together, they grew the business and by the time of his death, they were hatching half a million chicks a day for sale countrywide.
Mr Muguku held 6.08 per cent of Equity Bank shares at the time of his death — a stake that earned him the enviable distinction of being the bank’s largest individual shareholder.
His family has since his death sold off the shares – reducing that stake to 0.9 per cent that is currently worth Sh1.6 billion.
Had the stake remained intact as it were during the bank’s listing, it would now be worth Sh15.2 billion.
The renowned philanthropist also dabbled in real estate, owning prime property on Nairobi’s Mfangano Street as well as becoming the dominant property owner in Kikuyu Town.
It is this property portfolio that his family has now decided to boost by injecting an amount that is equal to the businessman’s net worth at the time of this demise into a new project.
Crossroads Limited, a company associated with the Muguku family and which is also said to own Crossroads Mall in Karen, is the sponsor of the new complex.
Freda Rutere, the director of Planning Project Management which is overseeing the construction, declined to respond to our questions on the mega project but promised to do so “before the launch”.
Phase one of the multi-billion-shilling venture will be a shopping complex that mimics similar ones that have dotted Nairobi’s landscape in the past five years.
The building’s ground floor will host an anchor tenant, besides chemists, clothes stores, a tyre centre, a grocery store, an art gallery as well as commercial banks.
The upper floor will have banks, retail shops, restaurants, a book store and salons. Phase two and three of the project will include high-end residential apartments, offices and a hotel.
“There are similar projects within the area… such as Karen Triangle Mall, Crossroads Mall and The Hub which is upcoming,” the proprietor says in regulatory filings. “This proposed development is therefore in harmony with the land use of the area.”
The Business Daily could not determine the scope of the phase two and three projects and their timelines.
Karen Waterfront will see the Muguku family join a growing number of private equity (PE), investment firms and private developers seeking to tap Kenya’s burgeoning middle class with growing disposable incomes.
At least seven new malls are under construction or have opened their doors to the public recently, including Greenspan Mall, Thika Road Mall and Mountain Mall located on the Thika Superhighway.
While the vast majority of shoppers in Nairobi still frequent traditional markets, habits are changing in favour of the shopping malls.
PE firm Actis has embarked on construction of the Sh12.6 billion Garden City mall, which at 50,000 square-metres will be the region’s largest mall. Centum, an investment firm, is constructing the Sh15 billion Two Rivers Mall in Runda.
A company associated with former attorney general Charles Njonjo is also set to build a Sh1 billion complex in the affluent Runda estate including a hotel, an office block and a shopping centre targeting business tourists and diplomats.
The Muguku family held a public consultation meeting with the members of the Karen Langata District Association (KLDA) in September where the residents gave the project the green light.
“The residents questioned how traffic into the project area will be handled and aired their concerns about its implications on security,” Rose Karobia, the association’s communication head, told the Business Daily on the phone.
“The company spearheading the project, including members of the Muguku family who were in attendance, gave their explanations and the residents gave them the go-ahead.”