Stanlib plans to build Sh1.2b mall in Athi River

Greenspan Mall in Donholm estate taken on 29th December 2015 {PHOTO:WILBERFORCE OKWIRI}

Stanlib is planning to set up a Sh1.2 billion shopping mall in Athi River. This comes after the company’s Kenyan subsidiary acquired the Greenspan retail space that it listed on the Nairobi Securities Exchange.

The asset management firm, owned by South Africa’s Liberty Holdings, will develop the mall off Mombasa Road and next to East Africa Portland Cement.

“The proposed mixed use development of Athi River Mall will comprise retail and commercial buildings consisting of anchor, fashion, financial, restaurants ... modern offices and other services,” the firm said in an application for approval sent to the National Environment Management Authority (Nema).

The mall will consist of basement, ground and first floors, as well as a rooftop. A private equity fund called Stanlib Africa Direct Property Development Fund is named as the proponent of the project to be called Athi River Mall.

 

It is too early to tell if Stanlib Kenya, which introduced the country’s first I-Reit (real estate investment trust) late last year, could be the buyer of the mall once it is completed.

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The Kenyan firm has, however, been clear that it is interested in acquiring several malls to be bundled into its I-Reit, which allows investors to own shares in big properties that they would otherwise not afford.

Stanlib raised Sh3.6 billion when it floated the issue, before acquiring Greenspan Mall from developer Shirish Shah in an estimated Sh2 billion transaction.

Investors bought into the I-Reit at Sh20 a share, and are guaranteed to receive payouts every six months from the rent collected.

Roberto Ferreira, the development fund’s manager, had earlier reported that his firm was planning to invest about Sh6 billion in Kenya, which would be spent in developing “high-quality commercial space”.

“We are one of a few asset managers on the continent with the ability to develop a fund and see it through from investments in greenfield and brownfield projects to steady-state core assets that can be transferred to an income fund or a domestic Reit. We are capitalising on our South African portfolio and using those skills in Africa,” he said.

He was clear that the exit from such projects would be about four years, during which time the commercial property is sold, potentially for the development of I-Reits, which its sister firm pioneered in Kenya.

Funds invested in the development of malls are often contributed by high net-worth individuals and institutions.

Top property managers describe the retail business in Kenya as vibrant.

“The shopping centre sector currently provides many of the most eye-catching examples of commercial property development in sub-Saharan Africa,” said Peter Welborn, the head of Africa at property management firm Knight Frank.

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