Investment firm Centum has raised Sh6.5 billion from South Africa-based Nedbank for bankrolling ongoing projects.
The re-financing deal was signed between the Nedbank Corporate and Investment Banking (CIB), the Nedbank property finance division, and Centum Real Estate, the real estate arm of Centum.
“Nedbank provided the financing to consolidate Two Rivers’ debt facilities and is currently working on five deals with Centum, which include developments in Kenya and Uganda,” Gerhard Zeelie, Nedbank CIB Africa divisional executive for property finance was quoted by South African media.
Centum Real Estate managing director Samuel Kariuki told the Business Daily the transaction had in part involved consolidating a primary existing loan owed to Standard Bank by the Two Rivers Mall.
“Centum Real Estate’s policy is to maintain an efficient capital structure that combines both equity and an optimal level and structure of debt,” said Mr Kariuki.
He said funds raised from the deal will be allocated to ongoing real estate projects by Centum including in Kenya, Uganda and Tanzania with completion dates between 2020 and 2021.
“Centum Real Estate is currently a master developer on three sites in Kenya and Uganda, namely Vipingo Development at the Coast, Pearl Marina Development in Entebbe and Two Rivers Development in Nairobi.”
Centum says it is developing 3,000 residential units across the three sites, of which the first phase of 1,200 units is under construction.
“To date, we have attained a 58 percent (700 units) pre-sale level on the residential units under construction.”
Vipingo Development which covers 10,254 acres and Pearl Marina which covers 384 acres are currently wholly equity funded, he said.
He said the Two Rivers Development, had progressed to the second phase of the development which will encompass additional projects on the 102 acres of land that Centum owns on Limuru Road in Nairobi, near the affluent neighbourhoods of Runda, Nyari, Gigiri and Muthaiga.
Its Sh25.2 billion Two Rivers Mall shopping complex, which sits on eleven acres opened in February 2017, and had an occupancy of 75 per cent as at last year according to Centum.
Even as Centum deepens its foray into real estate, it earlier indicated that it had struggled in the sector due to constrained credit access following capping of lending rate.
“Kenya’s real estate market also recorded the lowest capital appreciation compared to the previous six years, which is reflected in lower value uplift in our real estate portfolio during the financial year,” it said in its annual report.
Centum booked 48 percent jump in net profit to Sh4.12 billion for the financial year ended March 2019, partly boosted by capital gain and land revaluations.