Housing Finance funds Sh1bn Nanyuki mall in counties expansion

Corporate News

Frank Ireri, Housing Finance CEO. PHOTO| FILE 

By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com

In Summary

• The mall is partly owned by Kiloran Development Group, an investment vehicle of British nationals who have previously undertaken real estate projects abroad.
• Cedar Mall is their first property development in Kenya. Kiloran will manage the mall and, by virtue of their minority stake, provide a share of the seed capital not being provided by Housing Finance.
• Nanyuki is a vibrant resort town which serves as a common stopover for tourists and for Nairobi residents who travel there in out-of-town weekend getaways. Its residents include the British army which has a base there.

Housing Finance (HF) is the lead financier of a Sh1.3 billion shopping mall in Nanyuki that will see Chandarana Food Plus become the anchor tenant with its second outlet outside Nairobi.

The lender has committed Sh820 million in the construction of Cedar Mall, a 12,000 square metre retail complex that is scheduled to be opened by September next year.

Chandarana Food Plus, which was renamed from Chandarana Supermarkets, is a 51-year-old business which currently has eight outlets in Nairobi and another in Diani.

“This development will bring greater convenience to the residents of Nanyuki and beyond and is directly in line with our 2012-2016 expansion strategy that focuses on counties,” said Frank Ireri, the chief executive of HF.

The mall is partly owned by Kiloran Development Group, an investment vehicle of British nationals who have previously undertaken real estate projects abroad.

Cedar Mall is their first property development in Kenya. Kiloran will manage the mall and, by virtue of their minority stake, provide a share of the seed capital not being provided by Housing Finance.

Nanyuki is a vibrant resort town which serves as a common stopover for tourists and for Nairobi residents who travel there in out-of-town weekend getaways. Its residents include the British army which has a base there.

This demographic has made the town attractive to investors including retailers like Nakumatt Holdings which set up a branch there in 2010, skipping major towns like Nyeri and Karatina. Chandarana continues to be a relatively small brand in the sector with less than five per cent of national market share.

In the last decade however, it has transformed from a family-owned business that had a single store into one of Kenya’s high-end supermarket brands.

“We expect phase one of the project to open in September 2016 and have seen a considerable amount of interest from tenants,” said Andrew Gartrell, the managing partner of Kiloran Development Group.

“The shopping centre will be anchored by major local supermarket chain Chandarana Food Plus. Major national and international shops, restaurants, coffee shops and a food court will also be part of phase one construction.”

Nairobi is currently the venue of a shopping mall boom with several mega retail centres being built on the periphery of the city, targeting the rich and middle class with increasing purchasing power.

The malls have food courts, cinemas and luxury clothing lines that draw a large number of well-heeled shoppers who also shop at the supermarket outlets.

This trend now seems to be catching up with popular towns away from the capital city including Naivasha which recently saw the opening of Buffalo Mall.