Express Kenya to build 224 houses in Industrial Area

Express Kenya truck before it lost a contract to transport EABL products. The firm is planning to diversify into real estate. PHOTO | FILE 

By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com

In Summary

Express Kenya says it will construct a shopping mall and 224 residential houses on 15 acres of land it owns in Nairobi's Industrial Area.
The logistics firm plans to implement similar projects in other counties where it has land as it seeks turnaround.

Express Kenya will in July break ground for a multi-billion shilling real estate project in Nairobi’s Industrial Area as it races to transform the business, which reported a Sh77.4 million loss for the full year ended December.

The logistics firm says it will construct a shopping mall and 224 residential houses on 15 acres of land it owns as part of a five-year real estate diversification plan.

Express has suffered a sudden dip in fortunes after losing the key East African Breweries Limited (EABL) distribution business in 2011, with revenues for the past year dropping 55 per cent to Sh173 million from the previous year’s Sh387.4 million.

“The first phase of the real estate project is expected to begin in July and will see us build 224 houses and a shopping complex in Industrial Area,” Jane Nungari, a senior manager at Express Kenya, told the Business Daily.

“The company owns other pieces of land in several counties. The board is still discussing what real estate projects will be developed on them over the next five years.”

Express reported a net loss of 229 million in 2011, a net profit of Sh13 million in 2012 and then a net profit of Sh229,000 the following year.

The company attributes the poor earnings to loss of “key contracts”, a situation which has been aggravated by theft at its warehouses, exposing it to huge legal liabilities.

READ: Express Kenya in red as loss of EABL contract bites

The firm’s current liabilities for the year to December stand at Sh126.6 million while its current assets stand at Sh75 million. Its direct costs at the close of the last year dropped 56.3 per cent to Sh141.1 million from Sh323.4 million in 2013.

This gain was, however, eroded by higher administrative and other operating expenses which grew 28.8 per cent from Sh73.2 million in 2013 to Sh94.3 million last year.

The real estate plan – which was mooted in October 2013 – seems set to finally kick off, offering hope to shareholders of the firm that the fortunes of the company may improve in coming years.

Express has in the past indicated it has received interest from investors who want to partner with it in the real estate project, with some banks also willing to offer loans.