- The property is one of the biggest investments the family has made after divesting from the patriarch’s founding stake in Equity Group.
- Muguku, who died on October 10, 2010 at the age of 78 after a short illness, built a multibillion-shilling business empire from poultry farming.
- The planned sale of the Karen land and the shopping complex comes after the mall suffered from the economic fallout of the Covid-19 pandemic and the exit of its anchor tenant Shoprite, a South African retail chain.
The family of the late businessman Nelson Muguku is selling The Waterfront Mall in Karen, asking for Sh20 billion that will see the buyer acquire the shopping complex together with the 50 acres it is sitting on.
It is one of the largest asking prices in a single property transaction to be made public and signals the family’s move to exit their huge real estate bet.
A brief document advertising the sale of the asset says that the owners are willing to complete the deal upon receiving an acceptable offer and conducting due diligence.
The property is one of the biggest investments the family has made after divesting from the patriarch’s founding stake in Equity Group #ticker:EQTY.
The heirs sold shares worth more than Sh4 billion following the listing of the bank on the Nairobi Securities Exchange (NSE) in August 2006, a move that saw them drop out of the list of the lender’s top investors.
The family’s other real estate holdings include the former office of Standard Chartered Bank Kenya along Nairobi’s Moi Avenue and Cross Roads Shopping Centre, which is 850 metres away from The Waterfront.
Muguku, who died on October 10, 2010 at the age of 78 after a short illness, built a multibillion-shilling business empire from poultry farming.
The planned sale of the Karen land and the shopping complex comes after the mall suffered from the economic fallout of the Covid-19 pandemic and the exit of its anchor tenant Shoprite, a South African retail chain.
The family’s investment vehicles Crossroads Limited and Karen Waterfront Phase Two Limited signed a lease agreement with Shoprite on November 26, 2019, a move that saw the retailer take up space at the mall’s ground floor as the anchor tenant.
Shoprite, however, wrote to the proprietors nearly five months later, announcing that it was terminating the agreement effective July 31, 2020 after the end of a three-month notice.
The retailer, which has since closed all its supermarkets in Kenya, said it was exiting The Waterfront because of losses, adding that it did not see reasonable prospects of improvement.
The other branches it vacated are those that were located at Nairobi’s Westgate Mall, Garden City Mall and Nyali’s City Mall.
The Waterfront landlords rushed to court seeking to compel Shoprite to pay the rent for the remainder of the 10-year lease period amounting to $4.8 million (Sh527 million).
Justice David Majanja said Shoprite was only required to pay rent for the period it occupied the property in a judgment issued on June 22, 2020.
The real estate agent hired by the Mugukus say the property should be attractive to a buyer, noting that the undeveloped land offers major development opportunities.
“The Waterfront is the only 50-acre bulk of land at the centre of Karen and its prestigious environs,” the sales advert says.
“The property features over 30 acres of undeveloped land; a goldmine that can be converted into an ultra-modern mixed use development featuring high-end residential, commercial and recreational facilities – creating immense value for an investor. Karen is home to some of the most exclusive and high-profile residences in the country and continues to attract the wealthiest in society.”
Naivas, currently billed as the largest supermarket operator in the country, took up tenancy at The Waterfront following the exit of Shoprite.
Other tenants at the property include Game, a South African retailer, and Goodlife Pharmacy.
The mall also runs fun activities such as horse riding and water sports. “The excellent location and expansive nature of The Waterfront makes it an ideal spot for international brands looking to tap into Kenya’s rapidly growing middle class,” the sales pitch says.
Landlords of such properties have been forced to reduce rents due to oversupply of retail space and the economic fallout brought by the pandemic.
The Waterfront, which has 215,000 square feet of lettable space, is currently 66 percent occupied.
Waterfront Karen director, David Muguku, did not respond to a request for comment.