Industry News
Why Centum Is Selling Its Sh17bn Property Company
Firm wants to cut its exposure to volatility of property prices.
Centum Investment Co. PLC is planning a stake sale of its property subsidiary as it seeks to unlock capital gains while reducing its exposure to the volatility of property prices.
According to group chief executive James Mworia, Centum is open to selling part or all of its stake in Centum Real Estate to rebalance its portfolio that is now concentrated in real estate.
The proceeds of the sale will be used to acquire private equity and marketable securities.
“The money raised will be reinvested in marketable securities and private equity to reach our allocation target in these two segments,” Mr Mworia told the Business Daily.
RELATED: Centum Inks Sh6bn Deal for Two Rivers Business Park
Centum invested Sh7.8 billion in acquiring and developing the assets under Centum Real Estate – which was valued at Sh16.6 billion in the year ended March 2021.
As a result of massive gains in land and property prices, Centum now holds about 63% of its Sh47.5 billion wealth in real estate – exceeding its target maximum of 55%.
“We have gone above the target not because of increased investment in real estate but because of the gains in the land and properties,” Mr Mworia said.
RELATED: Centum, Haco to build 268 homes in Kasarani
The rapid growth of the real estate portfolio has cut Centum’s allocation in private equity and marketable securities to 20.5% and 16%, respectively – trailing the target of 40% and 20%.
Most of the company’s real estate assets, comprising of land and residential houses, are concentrated in Nairobi, Vipingo in Kilifi County, and Entebbe in Uganda.
Properties in Nairobi include Riverbank Apartments, and Cascadia Apartments, while those in Vipingo include Awali Estates and 1255 Palm Ridge. In Entebbe, Centum’s properties include Mirabella Residences, Riviera Town Houses, and 256 Bella Vista Apartments.
Centum Investment directly holds a stake in Two Rivers Development Ltd., which in turn holds a controlling stake in the Two Rivers Mall on Limuru Road in Nairobi.
Kenya Bets on South Korean Tech to Solve Housing Woes
Aluminum formwork enables faster construction with reusable molds.
State Orders Removal of Asbestos Roofs in 90 Days
Asbestos causes mesothelioma, a cancer that is difficult to treat.
Savannah Takes on Amsons with Sh25bn Bamburi Bid
Amsons recently offered Sh23.6bn to acquire 100% of Bamburi shares.
Mukuru Affordable Housing Handover Set for December
Bedsitters will rent for Sh3,200 per month on a 30-year rent-to-own plan.
Turkish Firm Inks $3bn Deal for Uganda Electric Railway
Yapı Merkezi is expected to complete the 272-kilometre railway in 48 months.
Work Begins for Sh3.6bn Ngong Road Flyover
The new flyover, funded by Spain, is expected to open in 2027.