The advantage our Kenyan economy has is a vibrant private sector that contributes enormously to the growth of our liberal economy. For example Fusion Capital Group has opened the sale of its development real estate investment trust, commonly referred to as D-Reit, at Sh23 per unit until 15th July to raise Kshs 2.3 Billion for this project that is already ongoing.
IN SUMMARY
[ul]
[li]The real-estate developer aims to raise Sh2.3 billion through the sale of 100 million units in a sale that closes on July 15.[/li][li]Investors in the Reit will require a minimum of Sh5 million, equivalent to 218,000 units, to participate in the offer which targets fund managers and high-net worth individuals.[/li][li]The project is valued at Sh3.7 billion with the mall taking up the most at Sh1.2 billion. The firm will spend Sh728 million to develop offices and Sh407 million in residential units.[/li][/ul]
āWe are delighted to be the first to give other investors a chance to access development returns in Kenya by investing in property development through a D-Reit,ā said Fusion chief executive Luke Kinoti.
A Reit is a unit of ownership in a real estate project allowing retail investors to participate in the capital intensive sector which has reaped high returns in the last decade. The project is valued at Sh3.7 billion with the mall taking up the most at Sh1.2 billion. The firm will spend Sh728 million to develop offices and Sh407 million in residential units. Fusion estimates it will pay Sh308 million to finance the project, 8.3 per cent of the project. Professional fees will take Sh573 million which is 15.4 per cent of the estimated cost of the project. The company has secured a Sh1.4 billion debt from NIC Bank to bridge the difference between the Reit size and the estimated cost of the project.
Its great to see the expansions of malls into the counties is accelerating as Nairobi has too many for now.
Iām sure but lets confirm with Ktalk resident investment guru @Okiya
Iāve always wondered why it took so long for such investments to reach Meru considering how much money circulates in that county. This will sale out quickly and then other developers will rush there as well.
This is not viableā¦itās too early for someone to undertake such project in meru the market there has not yet matured to accommodate such investments.
Actually its long overdue, the buying power is huge in Meru but amenities havenāt grown to meet that demand. They need diversification of investments, recreation and property. Meru is the own town where i see youth spend comparatively to adults in Nairobi.
The economy most affected (positively or negatively) by Miraa business is not Meru. Maua about 50Km north in the Nyambene hills is the epicenter of the miraa economy.
Garden city will be saved by the residential units currently filling up. Also Safaricom is building its HQ hub at Garden City business park leaving its current Waiyaki way HQ for the engineering section. So right now i wouldnāt right them off though their footprint is small.
Iām quite interested to know how Alba; the 5 star hotel in Meru is doing. That may be enough to let us into the purchasing power of the place.
Now the dynamics of doing business in a city and a āruralā town are extremely different. e.g. in Nairobi people are more receptive to malls etc but in smaller town people are way more cautious on how they use their money.
Ndio maana you will not get someone wearing a 12k shoe in a place like Eldoret despite being a millionare but in Nairobi someone on a salary of 200k is wearing a 15k shoes :D:D:D
Point, purchasing power may be there but the issue is what the people are willing to spend the money on.
Alba is currently doing very well. today was to check in but it is fully booked and is middle of week. last time was in meru was on a thursday and only two rooms were remaining.
Is is not whether they have money or not. The issue is what are they willing to spend it on?
e.g. I bet you can literally count the number of range rovers in the whole of the greater Meru region i.e. the town and the smaller towns but that does not mean these people cannot afford to purchase such especially with even credit. e.g. all of these Miraa magnates in the Maua regions and the more āurbaneā people.
I have been to Meru and in fact stayed at the Slopes hotel near Alba. What I noted is that majority of the spenders are not locals actually. They are Luos, Kikuyus who live there.
Something like Avanti just below there is almost dead like itās predecessor Sherlockās Den. What I have seen in all rural areas is that people are very very watchful on their spending. e.g. they tend to avoid the expensive stuff like plague
e.g. someone would gladly spend 5k on endless bears but the thought of buying a 3k Jameson bottle at once can literally kill him :D:D:D
Also most of the people with cash are older guys which may explain this.
You have some points there but also some generalization as well. Consumption is there everywhere even in my village. The difference here is the amount. For example for a teenager to get 500 a day in Meru is the norm. That why construction firms find it hard to get temporary workforce in that region because anything less than 500 a day is small. Thats 15,000 a month. Yes they wouldnāt spend as much as Lavington or karen but the developers knows this. He is just looking for enough spend as maybe Langata or N.West and they still make alot of money.
Now this almost make me doubt you. āWhat I noted is that majority of the spenders are not locals actually. They are Luos, Kikuyus who live there.ā The Meru i know is swarmed by locals and they are very active.
That assumption that āRange Rover folksā spend more collectively than the matatu people is a myth. Tuskys proved that, donāt underestimate the collective buying power of the small people.