Mauritian Firm Grit Sweetens Deal for Buffalo Mall Buyout

Mauritius-based Grit Real Estate Income Group has enhanced its bid for a buyout of Naivasha-based Buffalo Mall, signaling its continued pursuit of the deal.

The company, which holds a 50% stake in the mall, has raised its bid for the remaining 50% stake to $2.24 million (Sh314.2 million), up from $2 million (Sh280 million).

“Grit intends acquiring, subject to necessary approvals being obtained, an additional 50% interest in Buffalo Mall … that will result in Grit’s interest increasing to 100% for a value of $2,244,222,” the company said in a statement.

“Once Grit takes full control and ownership of the retail complex, it will be free to deploy the full extent of its asset management and leasing capabilities to reposition the mall and the adjacent owned 37,280 square metres of vacant land that has been earmarked for value-enhancing initiatives.”

Buffalo Mall sits on 45 acres at the turn-off on Moi South Lake Road, adjacent to the Nakuru-Nairobi highway, with phase one comprising a shopping mall [with a gross area of 7,480 sqm], offices, restaurants, and leisure facilities.

The mall, which opened its doors to the public on January 30, 2015, made a loss of $399,000 (Sh55.9 million) in the six months to December 2022, having recorded revenue of $149,000 (Sh20.9 million).

Grit, however, believes that it can turn around the mall’s fortunes by repositioning it and the adjacent vacant land for value-enhancing initiatives.

The company acquired its first 50% stake in the mall in April 2016 for $4.5 million (Sh630 million) but the subsequent years of ownership have coincided with tough operating conditions for retail space owners in the country due to increased competition as more developers put up similar facilities.

The throng of new malls countrywide has resulted in a supply glut that has piled enormous pressure to cut rental prices to retain or lure new tenants.

Growing competition and shrinking demand have emboldened tenants to flex their muscles in lease negotiations as landlords fight to keep spaces occupied.

RELATED: Mall Tenants Now Play Hardball in Lease Negotiations

Besides, the Naivasha mall, Grit is deepening its involvement in the Kenyan real estate market with direct and indirect investments in warehouses, diplomatic housing estate, and manufacturing facilities.

The company recently broke ground on a 10,721 square metres grade A warehouse facility for Orbit Products Africa Limited (OPAL) in Nairobi.

The project follows Grit’s Sh5.16 billion acquisition of the existing 29,243 square metres OPAL facility on a sale and leaseback basis in March 2022.

Join 15,000+ pros getting our weekly digest of news and insights.