GARDEN CITY: Largest Mall in East and Central Africa by ACTIS

IFC to inject Sh4bn in Thika Road Shopping Mall, Garden City comprise retail, leisure and residential segments

Posted in Business Daily Africa  |Thursday 9th May, 2013

howwemadeitinafrica.com by Dinfin Mulupi | Business Focus,, Kenya, Property, Retail | July 10, 2012

London-based private equity firm Actis is planning to invest in a 130,000 m² mixed use development in Kenya, which will host the largest retail mall in east Africa. The Garden City development will be located along the Nairobi-Thika road, a KSh. 27 billion (US$322 million) new highway.
This is the latest major commercial project to be announced ahead of the completion of the Thika highway in September. Thika is an industrial town about 40 km north-east of Nairobi. Actis is developing Garden City Mall on a 32-acre site that previously belonged to East African Breweries Limited.

Garden City is on Thika super highway. The upgraded road is expected to boost the demand for space at the mall. World Bank unit starts talks for loan and stake in Garden City on superhighway.

Actis has said Garden City will cost $150 million (Sh12.6 billion) over five years. The International Finance Corporation (IFC) is negotiating to inject Sh4.1 billion ($49.8 million) in Garden City Mall, a shopping complex conceptualised by private equity firm Actis.

The investment will be in form of a loan and equity stake in Actis, according to an IFC disclosure note seen by the Business Daily. Actis says that Garden City Mall, a development along the Thika Super Highway, will be the region’s biggest shopping complex.

Other firms that have eyed investments along the highway include supermarket chains Uchumi and Nakumatt, PepsiCo which is establishing KSh. 2.4 billion ($29 million) bottling plant, and European furniture chain IKEA. Several residential projects like Tatu City, Migaa, and Thika Green have also been inspired by the eight lane highway, which will ease traffic along the busy Nairobi-Thika road.
According to a press release from Actis, the retail mall will include a flagship store for Game, their first in Kenya. Detailed discussions are progressing with other foreign retailers looking to enter the rapidly-expanding Kenyan market, such as South African fashion group Foschini.
Other than the 50,000 m² retail mall, Garden City will also accommodate state-of-the-art commercial premises, 500 new homes and a central park, offering family friendly leisure space for Kenyans and visitors to the city. The park will also house an outdoor events arena for the staging of concerts and shows.

“Garden City offers a rare opportunity to create a large scale, world-class development directly serving the needs of Kenyan businesses, homeowners and shoppers. We have been encouraged by the strong demand shown by both local and international retailers, who like us, see Garden City as a landmark destination in Nairobi and the east African region. The inclusion of the central park and our commitment to green building measures will burnish Actis’s reputation as sub-Saharan Africa’s most experienced private equity real estate investor,” said Michael Turner, Actis head for east Africa.
The project is expected to attract more foreign retailers into the Kenyan market. Garden City is likely to send prices skyrocketing in neighbouring areas along the Thika highway.
Charles Kibiru, the managing director of Thika Greens, a golf estate located in Thika, reckons that Kenya should expect similar investments along the highway.
“Thika highway is the place to go. It is a hinterland and foreign investors should put their money here. We welcome the Actis investment because it will bring services closer to the people and help decongest the Nairobi central business district,” said Kibiru.
The project, he added, will also lead to job creation and economic development by attracting foreign brands to Kenya.

“Construction is expected to commence in June 2013 and IFC is considering a loan of up to $40 million and providing up to $9.8 million in equity to the project,” says the IFC note. Ground breaking for the multi-billion shilling project was planned for December 2012, and completion projected for May 2014.

 Garden City is using a ‘green-by-design’ approach incorporating sustainability measures from the very beginning of the design process: current features under discussion include water recycling and rainwater harvesting, the installation of solar collectors and the extensive planting of indigenous trees and landscaping forming a central park. Actis has a track record of successful real estate projects in Kenya, including its office complex Nairobi Business Park.