The Local Authorities Pension Fund (Lapfund) plans to build a Sh10 billion mixed-use development on the outskirts of Nakuru city.
The firm says this might be among the largest real estate investments in the county. Lapfund said it is planning a real estate project that will comprise a five-star hotel, office blocks, warehousing facilities, residential apartments and a commercial mall.
The development will be put up on a parcel of land previously owned by dry cell battery firm Eveready, which was sold in 2017 for Sh1.3 billion.
The fund said the investment will enable it tap into the expected growth of Kenya’s newest city.
“Lapfund intends to construct a commercial mall, a hotel, a modern warehouse block, an office block, petrol station, kindergarten and residential apartments and an amusement park within its parcel of land on plot L.R Nakuru Municipality Block 7/554 located along Nakuru-Kisumu Road in Nakuru County,” said Lapfund in disclosures to the National Environment Management Authority (Nema) as it sought environmental approvals. “The total estimated cost for the project is Sh10 billion.”
Lapfund is counting on Nakuru’s new city status to attract foot traffic to the mall, hotel and other consumer-focused facilities as well as increased demand for office space and residential units.
Nakuru was late last year conferred the city status, becoming the fourth city in the country after Nairobi, Mombasa and Kisumu.
“High economic growth and the ever rising population of Nakuru has led to rapid increase in demand for residential units and other social amenities,” said Lapfund in the environmental and social impact assessment report submitted to Nema. “Nakuru, having been upscaled into a city status, will undergo numerous infrastructure development and this project by itself is one of a kind with mixed use development within Nakuru Municipality.”
Lapfund caters for all employees of county governments and water companies, where members contribute 12 per cent while the sponsors contribute 15 per cent of the member’s gross salary.
The fund has over 52,000 members.
As at June 2019, Lapfund’s net worth was Sh35 billion invested in difference assets that include property, government securities, equities and deposits.
The investment by Lapfund could be among the major projects in the coming years in the county, with the city status expected to help Nakuru, which already brags of major projects, to attract more money.
Recently, the Geothermal Development Company (GDC) unveiled plans to set up a complex at its Menengai geothermal fields that will explore alternative uses of geothermal steam aside from energy generation.
The State firm has drilled geothermal wells and built steam gathering systems, which it has handed over to three private sector firms that are expected to build power plants.
It said that in addition to power generation, it could generate money by building a wellness spa that will include geothermal heated public pools as well as secluded high-end spas and cottages that are both heated and cooled by geothermal steam.
Energy is among the major industries in Nakuru, where Olkaria fields produce all the country’s geothermal power while those at Menengai are planned to start production in the coming years.
Tourism is also a major contributor to the county’s economy with one of the attractions being the Lake Nakuru National Park, classified among the few premium parks in Kenya.
Nakuru is also the home of Kenya’s flowers, one of the country’s foremost foreign exchange-earners.
Two years ago, a survey by the Institute of Economic Affairs showed it is easier to start a business in Nakuru compared to five other populous urban areas.
Economists attributed this to the mainly reduced tax burden that has made it more attractive to investors. The study gave the county an overall score of 89 in the tax sub-cluster followed by Eldoret (78) and Machakos (67).
Nakuru County is the fourth largest in terms of contribution to the country’s economy, accounting for 4.9 per cent of Kenya’s gross domestic product after Nairobi (27.5 per cent), Kiambu (5.9 per cent) and Mombasa (5.2 per cent).