Retail and office space – growth areas for Kenya’s property industry
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Mentor Management is one of the largest property development and construction management companies in East Africa. Majority owned by private equity firm Actis, Mentor is overseeing the development of multi-million dollar projects that are set to transform Kenya’s capital Nairobi. How we made it in Africa’s Dinfin Mulupi spoke to James Hoddell, chief executive of Mentor Management, about the opportunities and challenges in Kenya’s property market.
What property development projects are you currently undertaking?
At the moment our biggest project is Garden City, which is going to be the biggest mall in East Africa with residential units, a public auditorium, a hotel and offices. We are also working on the extension of the Nairobi Business Park. These two are exciting projects we are doing on behalf of Actis. We have several other projects, mostly office buildings, a children’s hospital expansion and a luxury development at the coast.
How will these developments impact Nairobi as a business hub?
We are raising the bar and changing people’s perception in terms of location. What we are doing with Garden City will change the perception about Thika Road (the development will be located along the Nairobi-Thika road). Everyone knows there is a big road there, but they don’t go to Thika Road.
At the Nairobi Business Park we have got a waiting list of people that want to come in, which is why we are doing the expansion. It has changed people’s perception about working out of town. These projects are bringing a lot of foreign money into the country.
These developments are also attracting foreign retailers. Last year we signed the first unit for Massmart in Kenya that will employ several hundred people. We are currently touring South Africa and Dubai to meet retailers and encourage them to come here. Retail is a big growth area in Kenya.
How did the market perform last year and what are the expectations for 2013?
Last year was an excellent year. We had equilibrium in demand and supply, which means people are able to choose and also identify with quality. There was a little bit of a slowdown towards the end of the year with people holding off making investment decisions pre-election. The most interesting thing for us is that we are seeing a huge number of international companies moving into the country. This translates to more demand for buildings. It is essential that the next elections go okay. I don’t think it will slow down the economy or the local market if we have the same problems that we had five years ago (2007/2008 post-election violence). There will be a bit of hold back, but ultimately things will keep going. It will however put Kenya five years back in terms of the appetite from institutional and international investors to come in.
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