CDC Group plc and IFC, a member of the World Bank Group, have announced an investment of US$32m in Garden City, a new mixed-use real estate development in Nairobi, Kenya.
The project, led by Actis, has been awarded Vision 2030 Partner Status by the Government of Kenya and will create over 650 direct jobs during the construction phase and over 800 more once completed. The investment will comprise US$25m from CDC and US$7m from IFC.
Situated off the new 8-lane Thika Super-Highway in North East Nairobi, Garden City will be built in two phases, comprising a 50,000sqm mall, 20,000sqm of office space, 420 residential units and a 3 acre park. The area is under-served from a retail perspective and is one of the fastest growing areas of Nairobi; it is estimated that 1.5 million people live within the immediate catchment, which is primarily a residential area.
CDC Regional Director Dolika Banda said: “Garden City will provide vital jobs in Nairobi, and benefit the local economy through its supply chain,infrastructure and new opportunities. Few investors have an appetite for green-field real estate projects in sub-Saharan Africa, so this investment sends a strong signal of our commitment to Kenya’s development and our confidence in its economic potential.”
Oumar Seydi, IFC Director for Eastern and Southern Africa, said, “Garden City opens new business opportunities and creates jobs. Local businesses will supply goods and services and Garden City is working with IFC and CDC to promote entrepreneurship, including a market that will enable artisans to serve local consumers without bearing the significant overhead associated with permanent retail space.”
Koome Gikunda, Investment Principal at Actis said: “Garden City will become a genuine mixed-use community and an enduring landmark that the residents of Nairobi and the region can be proud of. CDC and IFC are bringing their experience and expertise in backing this vision. The scale and ambition of Garden City builds Actis’ reputation as sub-Saharan Africa’s most experienced private equity real estate investor.”
Phase one of the US$250m project, which is already underway, will involve the development of 33,000sqm of retail space and 76 residential units. The site was purchased from East African Breweries Limited (Diageo) in 2011 and the construction of phase one is expected to be finished by the end of 2014. Anchor tenants already secured include established Kenyan retailers, Nakumatt and Tile & Carpet Centre, the latter opening its first mall-based store. Game is also an anchor tenant, in what will be Massmart’s first-ever retail outlet in Kenya.
Garden City will also contribute to improving skills for workers and local firms involved in the development as it will adhere to strong construction quality standards. Furthermore, as the first mixed-use development in Kenya, it will create a new asset class within the real estate sector – it is designed to become a hub for the whole East African region.