Private equity firm Actis will inject $22 million (Sh1.87 billion) in construction of the second phase of the Nairobi Business Park, its flagship real estate development in Kenya. Six new office blocks will be built in the expansion that will create an additional 15,000 square metres of floor space for letting next to Ngong Racecourse, along Ngong Road.
The development, which is located close to the Karen neighbourhood, is expected to be complete by the end of 2013. The piece of land where the business complex sits is owned by Association for the Physically Disabled of Kenya (APDK) and the Jockey Club. Michael Turner, Actis managing director for East Africa, said tenants will benefit from the ongoing infrastructure improvements in Nairobi. The Nairobi Southern by-pass, due for completion in mid-2014, will ease traffic pressure from Ngong Road that is being upgraded into a dual carriageway.
“We’ve been encouraged by the demand as we currently have blue-chip companies as our key tenants,” said Turner. The firm has a portfolio worth over $250 million (Sh21.25 billion) in real estate private equity in sub-Saharan Africa. It recently acquired a 32-acre piece of land from the East African Breweries Ltd (EABL) on which it will put up a mixed-use development dubbed Garden City.
It will inject $150 million (Sh12.75 billion) in the first phase of the Thika Road project to develop 37,000 square metres of space, including 500 apartments. Its previous projects in Kenya include The Junction shopping mall and the first phase of Nairobi Business Park in which 8,000 square metres of commercial floor space were constructed in 2004. “Kenya is currently undergoing rapid urbanisation and infrastructural development has stimulated activity in real estate and other sectors,” said Koome Gikunda, investment principal at Actis.
“It is also the hub into East Africa region, opening access to a population of over 120 million people – which will need everything from food, housing to workspace.” The PE fund has acquired a stake in Mentor Management, the firm that manages its real estate projects including the expansion of The Junction mall which cost over Sh800 million in construction cost. It hopes to exit some of the real estate projects in the country in about 10 years’ time.
Triad Architects designed the first and second phases of Nairobi Business Park. The design comprises Grade A building specifications which Mentor Management CEO James Hodell said will translate into reduced service charges for the tenants. “We are using sustainable design to bring down the cost for every user,” he said, adding that the firm was looking for companies to operate some of the facilities such as the fitness centre and restaurants.