- Centum real estate has posted KSh 650 million ($5.5 million) in consolidated operating profit for the year ended March 31
- The Kenyan company said the performance was driven by profits from the sale of houses and development rights business lines
- The sale of houses achieved significant revenue growth to KSh 1.8 billion from selling 301 completed homes
Centum Investments subsidiary Centum real estate has posted KSh 650 million ($5.5 million) in consolidated operating profit for the year ended March 31.
The Kenyan company said the performance was driven by profits from the sale of houses and development rights business lines.
During the twelve months, home sales achieved significant revenue growth to KSh 1.8 billion from selling 301 completed homes. The performance rose from the KSh 457million generated from 96 completed homes in the previous year.
Centum Real Estate noted that as of March 31 2022, residential businesses collected cash deposits of KSh 6.6 billion from a cumulative sale of 1,739 homes with a total sales value of KSh 14.8billion. The cash collected from residential customer deposits within the year rose to KSh 2.8billion.
Commenting on the performance, Centum Real Estate Ltd Managing Director, Kenneth Mbae said that results validate their business model that centres on being attractive, demand-led and focused on high growth.
During the period under review, Centum Real Estate said it realised strong cash flows to fund the construction of residential units, settle maturing debt obligations, and reduce the debt by KSh 836million on account of principal repayments.
It also closed the year with a strong liquidity position with a cash holding of KSh 1.6billion.
Development rights sales generated KSh 1.7billion from the sale of 843 acres, down from KSh 2.5billiom realised from the sale of 1,324 acres in the previous year.
“Centum RE is well positioned to capture the high unmet growth affordable housing market opportunity driven by sustained population growth and high urbanisation, creating high residential demand with limited quality housing supply in East Africa. We expect development rights sales to be a key cash flow generator based on the level of expression interest received,” said Mbae.
Going forward, Centum Real Estate expects to complete the construction of an additional 300-plus home, launch the phase 2 affordable housing project and pursue value creation.
In a related story, Centum Investment Company subsidiary Vipingo Development Limited (VDL) recently handed over keys to over 300 home buyers to their houses, following the completion of Phase 1 of the Palm Ridge Estate in Kilifi County, in the Kenyan coast.
Vipingo Development Limited said the KSh 1.5 billion housing estate comprises 330 units of one, two and three-bedroom four-storey apartments priced at KSh 2.5 million, KSh 3.5 million and KSh 4.6 million, respectively.
The August 2021 commitment marked the company’s second major residential estate development. It increased to about 400, the number of homeowners within the 10,000-acre master-planned development with a residential, commercial, school and industrial district.
“We’re consolidating our reputation as a developer that completes projects on time, on budget and to the highest quality standards, and that is why investors increasingly trust us with their money,” Mbae said at the time.
The project, dubbed 1255 Palm Ridge estate, sits on 10 acres of land, with amenities such as water, power, state-of-the-art security installations, sewer connection, parking, children’s play area and a swimming pool.
Mbae says it is suitable for residence or holiday homes and is also an excellent investment for rental and short-stay vacation homes (Airbnb).
Besides the residential estates, industrial and commercial nodes are under development on the sprawling land that was previously a sisal plantation.
The firm added that Phase 2 of the Palm Ridge estate, comprising 110 apartment units, is nearing completion in time for handover to home buyers.
The handover comes at a time when the growth of the real estate sector has been described as turbulent over the past five years.
The handover followed the signing up of a partnership between Centum’s other subsidiary Centum Real Estate, with NCBA bank to provide mortgage finance to aspiring homeowners.