Corporate News
Former president Mwai Kibaki has sold one of the jewels of his vast
business empire, the Union Towers (inset), in a multi-million-shilling
deal that affirms the position of real estate as one of Kenya’s most
lucrative sectors. FILE PHOTOS | NATION MEDIA GROUP
By SIMON CIURI, sciuri@ke.nationmedia.com
In Summary
- MKU founder says the university had found the building’s location in Nairobi’s CBD attractive and suitable for its planned expansion to the city.
- The Competition Authority of Kenya has authorised the transfer of the building to the new owners, allowing the university to roll out its expansion plan.
- The successful purchase of Union Towers should help MKU grow its presence within Nairobi’s CBD where universities are locked in a fierce battle for working students.
Former president Mwai Kibaki has sold one of the
jewels of his vast business empire in a multi-million-shilling deal that
affirms the position of real estate as one of Kenya’s most lucrative
sectors.
Mr Kibaki has sold Union Towers, the 14-floor building in
central Nairobi, to Mt Kenya University (MKU) for Sh800 million, making
it one of the priciest real estate transactions this year.
MKU founder and chairman Simon Gicharu said the
closing of the deal brings to an end a three-year bidding process and
paves the way for the establishment of the institution’s Virtual
Learning Centre.
“We have been pursuing avenues to strengthen our
virtual learning programmes and will be using the premises to coordinate
it,” said Mr Gicharu, adding that the transaction was closed for Sh800
million and financed through long-term debt from a local lender.
MKU has in the past used Co-operative Bank and Equity Bank
loans to finance its rapid expansion programme that has seen it open
campuses in eight Kenyan towns and in the Rwandan Capital, Kigali.
Until the takeover, Union Towers belonged to
Parkway Investment Limited, a company Mr Kibaki co-owned with former
minister Njoroge Mungai.
Mr Gicharu said the university had found the
building’s location in Nairobi’s CBD attractive and suitable for its
planned expansion to the city.
The Competition Authority of Kenya (CAK) has
authorised the transfer of the building to the new owners, allowing the
university to roll out its expansion plan.
Thika-based MKU is not new to Union Towers having occupied a number of floors in the building on long term leasing terms.
Politician Francis Nyammo who owns the building put it out
for sale after a local bank placed notices in the local press seeking to
auction it to recover money it lent its owners but had not been paid.
People familiar with the deal said Mr Nyammo had
found a different buyer who has agreed to buy the building at a price of
Sh380 million and has made a 10 per cent downpayment.
MKU, a private university, operates 12 campuses in
Nairobi, Thika, Mombasa, Meru, Nakuru, Mumias, Eldoret, Kitale, Lodwar,
Kakamega and Kabarnet. It also has a campus in Kigali, Rwanda and a
marketing office in Juba, South Sudan.
The successful purchase of Union Towers should help
MKU grow its presence within Nairobi’s CBD where universities are
locked in a fierce battle for working students.
Universities have in the past eight years spent
billions of shillings in the purchase or leasing of buildings in Nairobi
and other major towns where they have set up campuses targeting
students who attend classes after work.
Parking areas
Both public and private universities are estimated
to have spent more than Sh5 billion in buying buildings and parking
areas in downtown Nairobi alone in the past five years.
At least nine institutions — including the
University of Nairobi, Kenya Methodist University, Jomo Kenyatta
University of Agriculture and Technology, Kenyatta University, Moi
University and the Presbyterian University of East Africa — have
campuses in central Nairobi.
Economic Survey 2014 indicates that Kenya’s
university student enrolment grew by 34.9 per cent to 324,560 last year
from 240,551 the previous year.
The building has in recent years become a key
learning hub in the CBD that also houses Nyeri-based Dedan Kimathi
University’s city campus.
Private businesses
It also houses private businesses such as fast food chain Gallitos.
MKU’s pursuit of a virtual learning platform makes
it the second institution after Kenyatta University to do so and it
remains to be seen how the programmes will impact access to and quality
of university education in Kenya.
MKU’s acquisition of Union Towers comes two months
after it made a Sh300 million bid to acquire Inoorero Tower in Nairobi’s
Parklands are
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