Acorn Group unveils Sh40b investment plan

Property developer Acorn Group plans to invest Sh40 billion in a number of properties that will include shopping malls, offices, hotels and residential houses mostly in Nairobi.

The firm said it had already secured sizeable chunks of land for the developments that would be targeted at different market segments. In addition to having properties in upmarket areas in Nairobi, the firm will also be putting up shopping malls and mixed use developments in Mlolongo, Kitengela and along Jogoo Road.

Acorn said the plan has been put together in partnership with the asset management team from Britam. Britam owns a 25 per cent stake at Acorn and recently announced a planned buyout of Equity Bank's stake in mortgage lender Housing Finance, a deal once concluded will see the company firmly positioned in the property market.

Group Chief Executive Officer Edward Kirathe said the firm plans to raise finances for the projects through equity (20pc) and debt (60pc) while the remainder would be sourced from the public, through a process the firm would communicate in the coming months. The firm plans to break ground for the projects in October.

"We are putting together vehicles and process to allow as many Kenyans as possible to invest in these properties," he disclosed. "Some of the properties will be for outright sale but others will be managed internally, we will soon set up a real estate management arm that will manage the properties."

The flagship project is Arboretum Square in Kileleshwa, which the firm said would be a premier integrated lifestyle node in East Africa. Others include a shopping mall and mixed use development in Mlolongo and Elono Plains, which is a 200 acre master-planned development in Kitengela.

The plan for the major investments by Acorn comes despite concerns that the property market could be staring at a crisis of sorts due to an oversupply of high end housing units.

Prices of houses in upmarket areas especially in Nairobi have stagnated while many developers that had put up rental units targeted at the same market segment are finding a difficult time to fill up their properties, with others have had to sell the units or accommodate low paying tenants. Kirathe said though prices are down, it was temporary and mostly driven by recent slow economic growth.