Taj Mall risks Sh500m loan default in land row - VIDEO
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The servicing of a $5 million (about Sh500 million) loan borrowed from Shelter Afrique to build the Taj Shopping Mall is uncertain after the government reiterates that it will demolish the building to pave the way for upgrade of the Outer Ring road.
Taj Shopping Mall proprietor Ramesh Gorasia says he is having difficulties repaying the Pan African mortgager because the mall was only 25 per cent occupied as businesses keep away due to fears of the impending demolition.
The Sh1.2 billion Taj Mall in Nairobi’s Eastlands suburb of Embakasi, was officially opened on August 1, 2011. The shopping complex is now worth an estimated Sh5.4 billion, according to a July report prepared by Redfearn, a property valuer.
The servicing of a $5 million (about Sh500 million) loan borrowed from Shelter Afrique to build the Taj Shopping Mall is uncertain after the government Thursday reiterated that it will demolish the building to pave the way for upgrade of the Outer Ring road.
Taj Shopping Mall proprietor Ramesh Gorasia said Thursday he was having difficulties repaying the Pan African mortgager because the mall was only 25 per cent occupied as businesses keep away due to fears of the impending demolition.
But acting Land secretary Fred Matiang’i was emphatic that Taj Shopping Mall would be demolished as part of it sits on a reserve marked for the ongoing dualling of Outer Ring Road.
“I’m having a problem servicing my loan instalments. The threat of demolishing has scared businesses,” Mr Gorasia told the Business Daily Thursday. “They (Shelter Afrique) did a search and charged the title. If it had a problem, they would have refused.”
Taj Mall had previously charged the land to NIC Bank in 2000 and finished paying the loan in 2009, according to the title deed seen by the Business Daily.
The charge on Shelter Afrique was registered on September 3, 2009, official records show.
The Sh1.2 billion Taj Mall in Nairobi’s Eastlands suburb of Embakasi, was officially opened on August 1, 2011 by then vice president Kalonzo Musyoka.
The shopping complex is now worth an estimated Sh5.4 billion, according to a July report prepared by Redfearn, a property valuer.
Mr Gorasia said he was yet to repay ‘three-quarters’ of the Shelter Afrique loan. He also disclosed that he had other loans at Fidelity and Standard Chartered banks and an overdraft facility at Diamond Trust Bank.
Taj Mall sits at the roundabout of Outer Ring Road, North Airport Road and Airport South Rd.
The National Land Commission, acting on a request by the Kenya Urban Roads Authority (Kura), has revoked Taj Mall’s title deed saying it sits on public land.
The agency first raised queries on the Taj mall title in 2012, saying it sits on a road reserve. “The absurdity and illegality of the obtaining state is quite apparent even to the naked eye,” Kura said in a letter dated April 10, 2012.
NLC chairman Mohamed Swazuri has already ruled that part of Taj Mall sits on a parcel of land acquired by the colonial government in 1960 for the future expansion of Outer Ring Road.
“The commission orders that because the property was compulsorily acquired for road expansion the same is a public utility land and the title should be revoked,” said Dr Swazuri in a letter dated September 30.
Taj Mall argues it has a valid 99-year leasehold issued on October 26, 1999 by then commissioner of land Wilson Gachanja.
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