The increasing emergence of modern logistic parks in Kenya has been mainly attributed to favorable tax laws, increased e-commerce, intra-regional trade, and growth across various sectors, including manufacturing, retail, and health.
This is according to a new report by Knight Frank which indicates that a couple of logistic projects commenced during the first half of the year.
For example in February, a beverage manufacturer and distributor Kenya Wine Agencies Limited (KWAL) broke ground on its Sh4 billion manufacturing plant located in Tatu Industrial Park in Ruiru.
In June Packaging products manufacturer Super Plastics announced plans to open a manufacturing facility in Tatu Industrial Park.
Africa Logistics Properties (ALP) broke ground in June on phases two, three, and four of its 1,076,390 sq. ft modern warehousing complex located in Tilisi Logistics Park in Limuru.
The Sh1 billion project is expected to be completed in the second half of 2022, Phase one of the project which comprises 83,958 sq. ft is currently 50 percent let.
Nairobi Gate Industrial Park located off the Eastern bypass commenced construction on their smaller-sized warehousing units ranging between 4,306 sq. ft and 16,146.sq. ft expected to be completed in July.
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Infinity Industrial Park also located along the Eastern bypass completed Phase 1 of its modern warehousing complex targeting Small to Medium-sized Enterprises (SME’s).
According to the Knight Frank report, the 46 mini-units are currently being sold at Sh4,000 per sq. ft and each has a footprint of circa 7,616 sq. ft.
The report also notes that the telecommunications industry has experienced rapid growth both regionally and locally over the last few years, leading to increased demand for quality internet infrastructure.
According to Knight Frank, this has resulted in more data center operators constructing facilities to tap into East Africa’s growing digital economy.
Quoting the International Finance Corporation (IFC), Knight Frank notes that the African e-commerce market size increased by 42 percent in 2020 compared to 2019.
In March, IX Africa broke ground on a data center facility along Mombasa Road, Nairobi, and Icolo.io commenced construction on their third data center in May.
The 12,917 sq. ft MBA2 data center located in Nyali, Mombasa County is expected to be completed in the first half of 2022.
Icolo.io currently has two facilities in Miritini, Mombasa County (4,800 sq. ft) and Karen, Nairobi County (6,700 sq. ft).
During the reading of the budget statement, the national treasury announced several allocations to fast-track the development of Konza Technopolis City.
These allocations included Sh12 billion for the Horizontal Infrastructure Phase I, Sh3.6 billion for Konza Data Centre and Smart City Facilities, Sh400 million towards the construction of Konza Complex Phase 1B, and Sh200 million towards the development of Konza Technopolis Masterplan.
The report also notes that there has been an increasing number of undergraduates and an undersupply of formal student housing, which has resulted in increased activity for Purpose-Built Student Accommodation (PBSA) over the last few years.
In March, for instance, property developer Student Factory Africa in partnership with Dutch private equity firm Betonbouw B, announced plans to construct a 4,500- room student hostel facility in Karen in three phases.
Phase 1 of the Sh5 billion project will consist of constructing 1,500 rooms by 2022.
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According to the report, the student hostels are expected to be constructed in line with the IFC EDGE green building rating.
In June, AHL commenced construction of their Sh1.9 billion student hostel in Karen.
The 3,591-room hostel expected to be completed by 2022 will consist of both Qwetu their premium brand and Qejani their low-cost brand.
The hostels will target students who attend tertiary institutions around the area such as The Catholic University of East Africa and Kenya School of Law.
Knight Frank notes that AHL currently has 3 student housing developments under construction including the Nairobi West Qwetu Hostel targeting Strathmore University students and Aberdare Heights and Qwetu 4, both located near the United States International University (USIU).
“All projects are expected to be completed by the second half of 2021,” the report notes.
The property developer announced they will use part of their green bond to construct two properties near the University of Nairobi’s Chiromo Campus.
The 574-room Qwetu hostel and 704-room Qejani hostel are expected to be constructed in two years following the completion of their Karen and Hurlingham student hostels.