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Sunday, June 23, 2013

RIL buys plots for realty development in Nairobi

Mumbai:  Reliance Industries Limited (RIL) has expanded its wings by investing in real estate sector. Mukesh Ambani recently acquired 10 prime plots for their commercial and residential development for an amount of Sh2.9 billion in Nairobi. This deal was jointly inked by RIL and Delta Corp East Africa Limited (DCEAL).
In the deal, RIL owns major stake of 60 percent while 40% is owned by DCEAL. This is second tryst of Ambani in real estate. He has previously also acquired and developed prime plots within Nairobi which were either sold or rented to international organization, private firms and governmental agencies.

DCEAL recently published its annual report. In the report, it has mentioned that DCEAL has acquired 10 prime plots of land in Nairobi with a planned developable area of approximately 1.2 million square feet of commercial and residential assets.

There are four under developing projects with DCEAL currently. The company owns a total land of 27.5 acre. One reason for the Kenyan firm and Indian energy tycoon to deviate its investments to Nairobi is that with rising demands for both commercial and residential spaces, areas like Upper Hill, Westlands, Kilimani and Mombasa road are fast emerging as new commercial centres.

Recently Economist Intelligence Unit (EIU), the research arm of the Economist publication did a survey in which Nairobi ranked among 120 most promising global cities of the next decade. Nairobi made to the list along with seven other African cities. These cities were judged based on the parameters like city's economic strength, physical capital, financial maturity, institutional character, social and cultural character, human capital, environmental and natural hazards risk and global appeal. The city made it to the 112th position in the list of 120 cities. This shows that a horrendous task awaits the city developers.

"Specific areas to improve include improving city disaster management plans, improving city disaster management plans, improving environmental governance policies (water quality, waste strategy and air quality)," said Eva Blaszczynski, senior analyst at EIU.

She added," that said, Nairobi did make progress in this category, mostly its city real GDP growth rate which we forecast will be about 5.3 percent by 2025. Areas where Nairobi could improve is raising its GDP per capita rate as well as real GDP."

Nairobi was ranked as the city with fastest growth rate in rent for high-end commercial property in 2012 by Knight Frank.

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