Sameer targets higher rental income with new warehouse
Sameer officials during the Infill project groundbreaking event for a 260 Million Purpose Built Industrial Warehouse at Sameer Africa PLC Head office in Nairobi in November 2023.
“We have implemented the project under our built-to-suit model backed by a long-term, pre-construction lease agreement, offering our clients the advantage of a fit-for-purpose industrial space, while securing for the Company attractive and predictable rental income,” Sameer says in its latest annual report.
“The company has already signed a 12-year lease agreement for 100 percent occupancy of the new space, to be completed in the third quarter of 2024.”
The upcoming industrial property will have 45,000 square feet. Real estate has grown in importance at Sameer, contributing most of the revenue and being the only division to post a profit in the year ended December 2023.
Rental income increased 9.6 percent to Sh360.1 million in the review period, representing 92.2 percent of total revenue. The rental business made a net profit of Sh24.6 million, down from Sh181.5 million a year earlier. The tyre business and regional subsidiaries made losses over the two years. The company’s property investments include a 25 percent stake in Sameer Business Park and full ownership of Sameer EPZ Limited and Sameer Industrial Park Limited that lease space to firms operating in the export zones.
“The company has extended its property offering to more than 750,000 square feet of lettable industrial space with a mix of EPZ and non-EPZ facilities,” Sameer said in the report.
“We have prioritised customer service and our clients trust us to provide their warehousing needs, serving over 40 tenants in various sectors including distribution, retail, manufacturing, agro-processing, business process outsourcing and energy, with over 90 percent occupancy and high retention rates.”
Sameer has substantial land holdings and plans to sell part of the assets to reduce its debt load.
The company seeks to raise about Sh1 billion from the sale of 3.75 acres of leasehold land, with the transaction expected to be completed by the end of this year.
“The net proceeds from the sale will retire debt, resulting in savings in finance costs, and significantly reducing our exposure to foreign exchange losses,” Sameer said.
The sale agreement had been signed in 2022 but the deal has been held up by administrative and procedural delays at the land registry, the company said.
