- Breaking with the traditional trend of owner-occupied warehouses in Nairobi, modern warehouse and logistics parks are introducing a “build to suit” concept in response to the demand for Grade ‘A’ flexible distribution properties, allowing tenants customised options that can be expanded in line with their business needs.
Nairobi began as a railway settlement in the late 1890s. Later, it became the capital city of what was then British East Africa.
The extension of the town’s boundaries in 1919 and again in 1927 expanded the municipal area to about 30 square miles.
Today, the capital city of Kenya is a sprawling metropolis, covering 425 square miles and accommodating a resident population of 4.4 million people, according to the Kenya Population and Housing Census of 2019. Over and above this figure, Nairobi has a day population in excess of six million people.
Considering its legacy, warehouses in Nairobi have until recently been mainly owner developed and located in the old industrial nodes. These facilities tend to be small-scale Grade ‘C’ go-downs. They are generally of low structural quality and do not meet the standards expected of present-day logistics providers, distribution companies, e-commerce firms and pharmaceutical suppliers. In addition, severe traffic congestion and constrained operational efficiencies limit growth opportunities.
This is why Kenya is primed for new, well-located smart warehousing that complies with accepted international standards.
“Warehousing has evolved over the years, most significantly through advances in technology. Today, we note that an average warehouse is not simply a storage facility,” says Paul Williamson, Head of Leasing at Improvon, the developer of Nairobi Gate – a state of the art warehouse and distribution park on the Eastern Bypass in Nairobi.
The 103-acre Nairobi Gate Industrial Park is estimated to cost about $110 million (Ksh11 billion) on completion.
The creator, Improvon, is one of Africa’s largest industrial and logistics developers, in which Actis has a stake. Improvon has delivered over 20 million square feet (slightly more than 1.8 million square metres) of built-up space across sub-Sahara Africa since inception.
“Logistics and warehouse parks such as Nairobi Gate provide a real value proposition for our tenants. The more efficient our warehouses are, the lower the overall cost of occupation for our tenants become,” Williamson explains.
Kenya’s high economic growth rate and access to the rest of East Africa have attracted many foreign investors in the logistics and warehousing sector. Growth is further supported by the government’s efforts to enhance infrastructure in support of business efficiency, with remarkable success so far.
The first phase of the landmark Nairobi Gate Industrial Park development located off the Eastern Bypass of Nairobi is almost complete, despite some challenges as a result of the Covid-19 pandemic. The first two warehouses of 5,000 square metres each, will be handed over in August 2020.
“Despite delays as a result of the recent lockdown, construction is approximately 90 percent complete and we’re very excited to launch the development that will be a game changer for warehousing and logistics in Nairobi,” says Williamson.
With Jomo Kenyatta International Airport and the Inland Container Depot only about 30 minutes away, Nairobi Gate will be one of the best located industrial logistics parks in the capital city. The expanding consumer markets of Nairobi and up-country Kenya are in easy reach, as are source markets in Central Kenya.
Access from Thika Road puts the site within 25 minutes of the high-end residential areas of Runda, Muthaiga and Westlands. The Kangundo and Githurai-Kimbo link roads allow access via public transport to the key middle-income neighbourhoods of Kayole, Umoja, Saika, Githurai and Kahawa.
“Fast moving consumer goods companies, retailers and third-party logistics suppliers increasingly rely on efficiencies to gain a competitive edge. Modern, A-grade facilities such as Nairobi Gate enables quicker loading and unloading of trucks by up to 50 percent or 60 percent,” Williamson points out.
These efficiencies all start with the construction of the park according to international best practice. Wider roads and larger yards allow for easy navigation and turn-around of interlinked trucks, whilst multiple shutter doors and loading facilities on grade or at dock height support the quick loading and unloading of trucks.
“Time is money and the more efficiently we can get goods into and out of the warehouses, the more competitive our tenants will be,” says Williamson.
Modern warehouse facilities benefit from wider column grids and high underside to eaves (at about 13 metres) to allow for greater volumetric capacity. According to Williamson, being able to store goods in multi-level racking requires exceptionally level floors, that can also withstand the weight of heavy products.
Breaking with the traditional trend of owner-occupied warehouses in Nairobi, modern warehouse and logistics parks are introducing a “build to suit” concept in response to the demand for Grade ‘A’ flexible distribution properties, allowing tenants customised options that can be expanded in line with their business needs.
Williamson expects that in addition to location, customised and flexible spaces will be a deciding factor when logistics companies and retailers decide on a facility, especially with the adoption of online purchases being accelerated as a result of the lockdown due to Covid-19.
“This makes last-mile delivery a game changer for retailers as customers expect same-day or next-day deliveries these days,” Williamson stresses.