Mauritius firm to buy 50pc more Buffalo Mall stake


Buffalo Mall, Naivasha. FILE PHOTO | NMG

Mauritius-based Grit Real Estate Income Group will acquire an additional 50 percent stake in Naivasha’s Buffalo Mall in a deal valued at Sh262.5 million, the firm’s new financial disclosures show.

London Stock Exchange-listed Grit said in its financial report for the six months ended December 2022 that it has committed about $2 million (Sh262.5 million) towards purchasing the additional stake from the mall’s other investors, pending regulatory approval.

"In process of acquiring balance of shareholding in Buffalo Mall with a view to repositioning it in the market and internalising management," Grit's investor presentation for the period reads in part.

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By the close of 2022, Grit still held a 50 percent stake in the mall, which it was carrying at a value of $3.35 million (Sh435.8 million).

The mall made a loss of $399,000 (Sh52.4 million) in the six-month period, the disclosures show, having recorded revenue of $149,000 (Sh19.6 million).

Grit acquired the stake in the mall in April 2016 for $4.5 million (Sh590.7 million at today’s exchange rate) but the subsequent years of ownership have coincided with tough operating conditions for retail space owners in the country due to increasing competition as more developers put up similar facilities.

The Covid-19 pandemic also hit demand for retail space, both on account of reduced spending power among consumers and the sharp adoption of online purchases by Kenyans who were shielding physically from the pandemic.

Other than the mall, the Mauritian firm has been deepening its position in Kenya’s real estate sector with direct and indirect investments in manufacturing facilities, warehouses and a diplomatic housing estate.

In the second half of last year, Grit established a fully-fledged Kenyan office to serve its growing portfolio of assets.

The move is indicative of the growing importance of the local market to its overall performance, with Kenya accounting for 11.7 percent ($2.6 million/Sh341 million) of its net property income of $22.12 million (Sh2.9 billion) in the six months ended December 2022.

The firm also leased two parcels of land at Tatu City last year for a total of $5.8 million (Sh761 million), initially holding the assets for capital gains.

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Grit said the land leases will originally be for a period of 20 years with an option to extend to 99 years, subject to the options being exercised and further a total payment of $800,000 (Sh105 million).

The multinational added that it believes that the exercise of the options is virtually certain and therefore the extended period of 99 years was being considered to be the lease term.

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