Real-estate firm Acorn Group and NSE-listed Crown Paints have broken ground on a Sh1.2 billion office block in Lavington, Nairobi.
The development is part of the Acorn’s Sh40 billion properties planned over the next two years.
The two firms through a joint venture, Tiara Properties, have begun developing Tiara Office Park, an upmarket six-story office block with 88,000 square feet space set for completion in January 2016.
Acorn Group chief executive Edward Kirathe said the block will target multinational corporations and local companies seeking high quality office space in the increasingly popular part of Nairobi.
“With the commencement of construction of Tiara Office Park, we have begun implementing our real-estate deal pipeline that seeks to meet the demand in quality office space,” said Mr Kirathe.
“The growth of commercial buildings being witnessed in areas like Upper Hill, Westlands and now Lavington is a testament to this demand.”
Quality office space
Tiara Office Park is the second project under the joint venture and there is a possibility of a third in the second half of 2015.
“We did Tiara 1 Office building, this is our second and we will be talking again beginning July as we plan for a third project providing quality office space,” said Tiara Properties chairman Hussein Ramji.
China Zhonzing is the main contractor while South African firm Boogertmann and Partners are the architects. China Zhonzing also constructed the 18-storey Cardinal Otunga Plaza in Nairobi.
Acorn did not give a breakdown of how Tiara Office Park would be financed but it has previously said typically 60 per cent financing comes from debt, 20 per cent from equity and the balance from a mix of the two.
Recently, the company said that it would partner with private equity firm Cytonn, which would search for funding leaving Acorn to concentrate on its core activity of development.
Cytonn takes over the role from Britam which was initially tasked with looking for financing for the projects. Britam has a 25 per cent stake in Acorn Group.
An office space report by Mentor Management Group found high-end areas including Upper Hill, Westlands and Waiyaki Way nodes in Naiorbi are expected to provide up to 70 per cent of office space between 2009 and 2016.
These areas are also popular amongst staff working at multinational corporations due to proximity to serviced high-end apartments.