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Ben Woodhams: The man who inspired Kenya's malls boom

FINANCIAL STANDARD
By Wainaina Wambu | Mar 15th 2022 | 8 min read
By Wainaina Wambu | March 15th 2022
FINANCIAL STANDARD

Knight Frank Kenya MD Ben Woodhams during an interview at his Lion Place offices, Westlands, April 2014. [Tabitha Otwori, Standard]

After four years in Dar es Salaam, Tanzania, Ben Woodhams in 2003 bundled his belongings into his first-generation Land Rover Discovery and headed north to Kenya.

The long, adventurous and tedious drive was to take up a job that would redefine Kenya’s prime property market.

“Running the Kenyan business was a real opportunity not just to go back to my roots but also to take up a bigger role in the organisation. It had staff four times bigger and turnover ten times bigger,” recalls Mr Woodhams of taking the helm of Knight Frank Kenya, a position he is leaving after almost two decades. 

Mr Woodhams is moving to Knight Frank’s headquarters in London where he’ll run the Africa desk and the company’s Africa capital markets service line.

He will be replaced by Mark Dunford, an experienced real estate professional and former head of East Africa at Jones Lang LaSalle (JLL).

Looking back on his posting to Nairobi, it was a sort of coming home for him as he had spent 14 years of his childhood here before going to the UK for further studies.

After his studies, he worked for an investment agency in London and was having lunch with a friend who mentioned “there is this job in East Africa.”

The London-headquartered real estate management firm wanted someone to run the Tanzanian office. Woodhams was immediately intrigued.

ICEA Building, Westlands, Nairobi, November 2015. [David Gichuru, Standard]

“The next day, a Monday, I phoned the Knight Frank reception and I asked for the partner responsible for Africa. They put me through to him. I said: ‘I hear you’re looking for a person to go to East Africa’,” he remembers how his confidence got him the job that would bring him back to the region.

The partner confirmed that they were indeed hiring but would advertise it internally.

“I said: ‘don’t waste your money advertising, you’ve found the right person’,” Woodhams told the partner.

The partner chuckled and invited him for a meeting. The rest, as they say, is history.

During his tenure, Mr Woodhams is credited with growing Knight Frank’s revenue by 700 per cent and positioning the firm as a real estate powerhouse in the country.

When he took over the Kenyan office, it wasn’t that big, and he immediately developed a strategy to grow it. The strategy involved partnering with High-Net-Worth Individuals (HNWIs).

“I developed relationships with HNWIs and their architects and helped them build buildings that we knew people wanted. We could guarantee we could fill the buildings with the best quality tenants in the shortest time possible, at the highest possible rent,” said Mr Woodhams.

“Not only did we help them build the right property to the best level, we filled it and it was income for us… we still manage those properties up to this day.”

Some of the buildings include Purshottam Place, Eden Square and Nairobi Business Park.

He describes his entry into Kenya as “very fortunate.” There was a lot of optimism in the economy with the coming into power of the Mwai Kibaki presidency. We were very lucky Nairobi was booming at that time. We were in the right place at the right time, and we capitalised on it,” said Mr Woodhams.

The office market was picking up fast, and Nairobi was solidifying its presence as a regional hub.

“Those days, if you wanted to go to central Africa, you’d have to fly to Johannesburg. It was crazy everything was run from Joburg, which is at the bottom of the continent,” Mr Woodhams told Financial Standard.

“Everybody was waking up to the realisation that an East African regional hub was needed, and the natural choice was Nairobi. We were here when it was becoming that powerful regional hub. We helped build Nairobi for sure and helped set the standards,” he added.

Mr Woodhams explained that the relationship with HNWI developers helped cement the firm’s future.

Knight Frank has since become very popular with its annual wealth report that tracks how the rich spend and invest their money.

“We were able to tweak the designs of the building to make sure the layout was elaborate and the best it could be for international tenants, whom we knew what they wanted.”

When he got here in 2003, Sarit Centre, Village Market and Yaya were Kenya’s only established malls. Nairobi is now drowning in an oversupply of malls.

Mr Woodhams acknowledges he had a hand in popularising malls in Nairobi, noting that the ones he found in the market hadn’t been designed as malls and weren’t laid out that well.

The developers of Capital Centre along Mombasa Road would engage the firm on the design.

Ben Woodhams at Capital Club, February 24, 2021. [Wilberforce Okwiri, Standard}

“It was probably the first mall that was designed from the ground up on a bare site. We had the anchor tenant and line shops and it was laid out properly, including the entrances.”

The opportunities were in the retail segment of the property market. Knight Frank was good at managing offices.

This was the time that a retail specialist came into the property market and designed the Junction Mall on Ngong Road.

“That was the tipping point for us as Knight Frank… all this time we’d been managing office buildings. In an office building, you want to keep your tenant private and secure. If you want to visit a tenant, you have to pass through strict security. However, with retail, that model is turned upside down; you have to get as many people there as easily as possible. This was a big learning curve,” said Mr Woodhams.

He explained that they had to treat the Junction Mall as a “living and breathing animal” that needed “nurturing and encouragement.”

“In an office building, you don’t care who’s above or below you … in a mall, it’s essential that you get that tenant mix right, get the right anchor and tenants in,” said Mr Woodhams.

They also had to get the marketing right in that they were property managers and didn’t know how to promote a mall.

The firm has since evolved and has a team that leases malls that it doesn’t even manage, for example, The Hub, Karen.

He said while HNWIs own a lot of prime properties in Nairobi, they have also allowed Knight Frank to manage competitors’ properties.

“Shareholders were extremely tolerant of us working with others, including competitors, and allowed us to grow the business without being curtailed,” said Mr Woodhams.

The local shareholders mostly come from old money.

“These contractors were mostly third-generation Kenyans of Indian origin. Most of that community went into manufacturing, trade, but a lot of them became contractors. These contractors have built some of the best buildings in Nairobi, developed from their private wealth and family pension funds,” said Mr Woodhams.

As property managers, Knight Frank deals with high-end properties, be it residential, commercial or office.

It’s involved in selling properties priced at billions of shillings in locations such as Karen, Westlands, Lower Kabete, Runda and Nyali.

Knight Frank was recently appointed leasing agent for the Global Trade Centre (GTC) Office Tower after signing a deal with its developer AVIC International Real Estate (Kenya) Ltd.

The firm will be responsible for leasing out prime office space in the 42-floor and 184-metre skyscraper, which is situated along Waiyaki Way, Westlands.

It targets multinationals and has significantly changed the Westlands skyline, dwarfing the Villa Rosa Kempinski Hotel.

Mr Woodhams said the high-end segment in real estate is where the money is.

“When you have a few agents, you focus on the high-end market because that’s where the margins are. You can’t make money in the mass market owing to our small team. The market is flooded by briefcase brokers, and we can’t compete with them, so we tend to focus on the high-end side.”

One of the biggest words on the property market in the country today is oversupply - too many malls and office spaces.

GTC Tower, January 13, 2022. [Elvis Ogina, Standard]

“When somebody sees success in one place, they think they can replicate it somewhere else, but it doesn’t always work,” he said of malls.

Real estate experts say that developers started mega constructions on the premise that Kenya’s economy would continue to expand from the Kibaki era and would require office spaces.

This was on the back of huge infrastructural projects.

The last few years have seen most organisations shift from the Central Business District, creating “extensions” full of skyscrapers in areas such as Westlands, Kilimani, Parklands and Riverside.

Acknowledging the magnitude of GTC, Mr Woodhams, however, says that Nairobi is big enough to be able to absorb that space.

Other commercial properties Knight Frank manages include Riverside Drive and Delta Chambers in Westlands and the Sameer Business Park along Mombasa Road. The firm’s commercial property services also include wealth management, valuations, land and industrials and logistics.

The firm saw profitable growth from 2003 to 2015 despite shocks such as the global financial crisis and Kenya’s 2007 post-election violence, but Mr Woodhams reckons they could have done better.

He said the firm was slow to react to changes owing to its past success.

“We were growing every year, taking in more buildings more staff, but for the first time in 2016, that growth stopped. We had an oversupply in retail, office space and yet we kept on growing because that’s all we’d done and we certainly realised that our turnover was going down and our cost base up; we were too slow to react,” said Mr Woodhams.

Since 2016, the market has been difficult. But he notes that the firm has never lost or borrowed money.

They were, however, quick to react to the Covid-19 pandemic, with top managers taking a 20 per cent pay cut and tightening expenditure. Shareholders also had to skip dividends. The firm has since reinstated salaries in full.

Another regret is Knight Frank’s inability to break out from Nairobi.

Despite the property boom spreading into the counties, the firm only has small offices in Nanyuki, Nyali, Mtwapa and Malindi.

“That’s because Nairobi is where the money is. We’ve struggled to follow devolution,” said Mr Woodhams.

Another challenge has been adapting to the changing market, with Mr Woodhams admitting that it has been hard to strike profits since 2015 when oversupply hit the market.

Other foreign and well-heeled real estate agents have also since entered the market.

Leaving Kenya is also another major regret. He shivers when he thinks about the harsh UK winter. He became a Kenyan through naturalisation. His last born was born here too.

“I will miss the people, culture, weather and friends. I will still be working for Knight Frank in an African capacity, and I hope that I’ll be able to frequently come back,” said Mr Woodhams.

“I won’t miss the matatus and traffic to work, though,” he chuckles.

An outdoorsy person, he regrets that he won’t get to cycle his mountain bike in the Rift Valley.

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