Mega mall to influence cost of property along Thika Road

By Morris Aron

Property along Thika Road is set to undergo transformation following recent reports that Actis, the London-based private equity firm, is set to construct a multi-billion shilling shopping mall.

Property players say the construction, coming soon after the upgrading of Thika Road, is bound to see property prices rise and modern building designs come up to match the development.

"With these developments coming, we can expect large movement and redevelopment of plots on this stretch of road," said Gerald Taylor, Managing Director of Willmary Development.

"Already, land values have increased exponentially and idle land is a scarce."

Analysts say the proposed mall will see transformation of the Kasarani area, which houses buildings of the 1960s and 1970 transformed into modern houses and renew investors’ interest along the highway.

Over-heating

But even as investors eye the area, there are concern over possible over-heating of land prices in the region to levels ‘beyond affordability’.

Research shows land values along Thika Road in 2007 were about Sh5m per acre. The same property is now valued at Sh50m per acre.

"Even as we have the good news, the question here is, are land prices be sustainable?" said James Kariuki, a property dealer.

Analysts say in the short-term, property prices will hold and may even appreciate further. Going forward, property prices, particularly the land factor, many say are bound to stabilise.

"The rate of increase in prices will start to stabilise as spending infrastructural development thins out and the pressure on the infrastructure inhibits the ambitions of many investors," said Taylor.

Actis recently acquired 32 acres to develop the shopping mall, a development that will also include construction of a mixed-use development, comprising offices, a hotel and commercial and retail areas.

Actis said it has its eyes set on the region’s real estate sector, with plans to invest a further Sh6.4 billion.