Uchumi, Kenya Airport Authority fight over prime property

Uchumi Supermarket along Lang'ata Road, which is at the centre of dispute.

Uchumi Supermarket yesterday came out fighting over its Lang’ata Hyper branch, which it has placed on the market but is now claimed by Wilson Airport, setting the stage for a new bout certain to derail the retailer’s revival efforts.

Company Secretary John Wambugu dismissed Kenya Airport Authority’s (KAA) claim on the multi-million-shilling property saying that Uchumi has occupied the premises for 19 years.

“Uchumi would like to confirm that it is the registered proprietor of the property and holds a valid title having purchased the same from the grantee of the property on October, 11 1996,” Mr Wambugu said.

He was responding to a public notice issued by KAA last week warning prospective buyers of the property, which sits on a nearly four-acre parcel touching a corner of Wilson Airport along Lang’ata Road.

Uchumi says the National Land Commission (NLC) had confirmed in writing that the retailer was actually the duly registered owner of the property. It is relying on the property search results from the NLC sought by one if its lenders, the Industrial and Commercial Development Corporation, where the premises were used as collateral for a Sh300 million loan.

A letter signed by Peter Kahuho, for NLC Chairman Muhammad Swazuri and sent to ICDC, confirms that the land was once owned by KAA but was transferred to a private developer. “After planning, it was allocated and a title issued to Fendi Investments Ltd,” Mr Kahuho’s letter reads.

Uchumi acquired the land from Fendi Investments before putting up the mega outlet. Several other businesses, including a second-hand vehicles yard are Uchumi’s tenants.

“The current registered owner is Uchumi Supermarkets Limited,” Kahuho said.

It is not the first time that KAA has tried to wrestle the land from Uchumi, after a previous failed attempt more than two decades ago.

Then, KAA had complained that huge tracts of land had illegally been hived off Wilson Airport by developers who had put up business premises and homes. In the latest attempt, KAA has warned prospective buyers off the Uchumi parcel saying that any dealings with the land would be at their own peril.

“It has come to the attention of KAA, the proprietors of the land, that a company, namely Uchumi Supermarkets, who purports to own the land is trying to sell, lease or deal in one way or another with the land,” said Yatich Kangogo, KAA’s acting managing director.

Mr Kangogo did not respond to our queries on the next course of action, which could involve seeking judicial intervention now that NLC’s letter could embolden the retailer.

The stakes are specifically high for Uchumi, which is betting on the disposal of the premises to improve its cash flows. Insufficient cash has been a threat to its business and in the recent past, the supermarket been unable to pay for supplies promptly, resulting in disruptions and empty shelves.

A decision to dispose the premises that house Uchumi’s Lang’ata Hyper outlet, alongside two other prime assets, was made two months ago. Another premise along Ngong Road that houses another branch has a price tag of Sh2 billion.

Disposal of the assets is at the centre of Chief Executive Julius Kipngetich’s turnaround plans.