Money Markets
An artistic impression of Mhasibu Property’s multi-storey commercial building set for construction. Photo/Courtesy
By John Gachiri, jgachiri@ke.nationmedia.com
In Summary
- Multi-storey building to be put up in Kilimani set for completion in 2016.
- The development will be financed through a mix of equity and debt.
- Mhasibu has already invested in the residential property market with the 226 housing units it is constructing in Runda.
Sacco-owned Mhasibu Properties is putting up a
multi-storey commercial building in the Kilimani area of Nairobi in a
project estimated to cost as much as Sh500 million.
The commercial complex dubbed Mhasibu Towers is
owned by the development arm of Mhasibu Sacco, a society whose core
patrons are accountants.
The building to be located along Kirichwa Road
will consist of two wings, a 12-storey and nine-storey tower. It is
scheduled for completion in 2016.
The exact cost of the project that further cements
the return of saccos to commercial office business is not known but its
promoters estimate it at between Sh450 and Sh500 million.
“We are now in the process of tendering for
contractors. Construction should begin within the next four to five
months. The project should take two years,” Mhasibu Properties chairman
Oliver Adera told the Business Daily.
The development will be financed through a mix of
equity and debt. But the sacco says any borrowing would depend on how
much off-plan space the developers can dispose of and the amount Mhasibu
will raise from members now estimated to be around 7,000.
Mr Adero said the company will be selling shares
in the property company at Sh100 per share, with the least number of
shares a member can buy set at 500 translating to a minimum investment
of Sh50,000.
Mhasibu has already invested in the residential property market with the 226 housing units it is constructing in Runda.
The revitalised sacco movement that today controls
billions of shillings has become a force to reckon with in the real
estate sector, buying and selling vacant land or building houses and
offices for sale.
It is a return to the old sacco ways of the first
decade of Kenya’s Independence, but backed by strict regulation and new
business models to avoid tying down cash.
The Sacco Society Regulatory Authority (Sassra)
has carried out stringent enforcement of rules to avoid pitfalls of the
earlier saccos.
Property management firms say areas such as
Kilimani are at the ‘rising phase’, which is characterised by office
space supply being less or at par with demand.
Mentor Group’s survey of commercial property in
Nairobi released in February said Kilimani still has room for expansion
as it has a fair share of houses and apartments that have not yet been
converted to offices.
Neighbouring Ngong Road — mostly made up of
residential property, shopping malls and schools — makes Kilimani even
more attractive for putting up offices.
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