With recent troubles in Kenya which included political uprisings and rioting in the streets, many would-be property investors were initially deterred from investing in the nation. However, with the announcement of several near concluded deals, it appears as though the concerns of Kenya's uncertain political and business atmosphere are being overcome by the opportunity available in the country for anyone with the steely nerve to conduct business there.
Last Friday in Nairobi, the City Council sealed off a 3.3 acre plot being used as a parking lot in a busy commercial district. Situated directly opposite of the Grand Regency Hotel on Uhuru Highway, the location was sold to Arrow Webtex, a real estate firm based in Mumbai and Mr. Mukesh Ambani, for the sum of Sh1.4 billion. The two owners will share rights to the plot with a 60/40 split ownership in an entity named Delta Resources. Initial plans are to build a shopping mall and a hotel on the location.
This development by Delta Resource is only the latest in a string of developments where foreign property developers have decided to take a share of the city's lucrative industrial, office and retail real estate business. Business process outsourcing (BPO) is a key area which Delta Resources hopes to exploit. A source who preferred to remain unidentified stated, "Despite the uncertainty over the last two months, many companies still believe that Nairobi is the springboard on which to enter the East and Central African Region."
When a recent report by the property firm Regent Management was released, it stated that occupancy rates were primarily above a threshold of 85%, and many companies decided to enter Nairobi’s real estate investment market. It appears as though there are also several real estate firms which have been diligently working behind the scenes in order to gain position as they wait for May when the first Real Estate Investment Trusts (REITs) will be listed on the stock market.
