Market News

Warehouse developers turn to Nairobi bypasses


Warehouse developers are shifting attention to Nairobi bypasses. FILE PHOTO | NMG

Warehouse developers are shifting their attention to the areas opened up by Nairobi bypasses, shunning the traditional nodes on Mombasa Road and industrial Area due to favourable land prices, expansion space and easy accessibility.

A warehousing market report by property development firm Tilisi Development released on Wednesday in Nairobi shows that the price of land on Mombasa Road and in Industrial area is expensive compared to what upcoming industrial parks along eastern, southern and northern bypasses are asking for.

“Land prices generally along Mombasa Road and Industrial area are ranging between Sh80 million and Sh100 million per acre, that is, in the first row. If you go in, you might get with Sh60 million.

Compare that with the price that we have of Sh30 million per acre in these other areas, and you can see why the market is shifting that way,” said Tilisi co-chief executive Kavit Shah. Tilisi said access and location of the warehouses is vital as they determine how easy it is for a company to distribute and receive goods.

New warehouses are emerging on Thika Road and in areas along the northern, southern and eastern bypasses.

READ: Warehouse investors shun cities over traffic jam delays

Those on the eastern and southern bypasses have made it possible for the companies to save up to 30 per cent on logistics costs, the report showed.

Mr Shah said these new warehouses are offering improved designs and facilities, with many claiming Grade A status, compared with the mainly Grade B and C warehousing currently in use.

The firm says in the report that the country has an acute shortage of warehousing facilities with pharmaceutical, logistics and fast-moving consumer goods being the most affected sectors.