Residential Projects

Eveready Cancels Nakuru Mall Plan Due to Glut Concerns

A feasibility study failed to support the viability of a shopping mall and apartments at the site.

Updated on

September 16, 2016

Eveready managing director Jackson Mutua. PHOTO | COURTESY

Eveready East Africa has cancelled a plan to build a shopping mall on its prime plot in Nakuru, with management deciding instead to sell the land.

The planned mixed-use development, comprising a mall and apartments, was announced in October 2014 when the firm closed its Nakuru battery-making factory amid stiff competition from importers of cheap batteries.

Eveready established a new subsidiary, Flamingo Properties Ltd., which was to help it make a foray into the lucrative real estate sector.

But last week, the firm said that it was seeking shareholders’ approval to sell the 18.5 acres on which its redundant factory sits.

According to managing director Jackson Mutua, the decision to dispose of the property was arrived at after a feasibility study done on the land failed to support the viability of a shopping mall and apartments at the site.

Eveready says it will use the proceeds of the sale to retire costly debts, reduce interest burden, and yield cash flow.

“The sale of this property will result in the company eradicating its cost of finance and unlocking funds for investment in more productive areas,” the firm said in a regulatory filing.

Commercial real estate

Eveready becomes the latest firm to shelf its ambition to invest in commercial real estate amid growing fears of a property glut in major Kenyan towns.

Early this year, KenolKobil abandoned its plans to build a Sh1.5 billion tower in Nairobi’s central business district, which was to serve as its headquarters.

The oil marketer said its management had scrapped the plan following what it described as the “cooling of the market” due to an “oversupply of office space”.

East African Breweries (EABL) is also trimming its real estate portfolio having recently sold its Ruaraka head office building for Sh675 million to Tembo Sacco, a 2,400-member sacco comprising current and former employees of the beer maker.