Private equity fund Actis is looking to raise up to $104.6 million (Sh14.7 billion) through an even split of debt and equity sale in its Garden City Mall and business park on Thika Road.
Actis outlined the capital move in a pitch for investment made to the Kenya Pension Funds Investment Consortium (Kepfic), in response to a call made in December 2022 for investment proposals from companies and project sponsors.
In the proposal, Actis told the consortium that it is seeking an investment worth $74.6 million (Sh10.5 billion) in relation to the mall, split into $37 million for debt and $37.6 million in a secondary equity sale.
“This exciting real estate opportunity to own this popular destination mall is to acquire between 49 percent and 100 percent of the share capital of GC Retail (Mauritius) Limited from its parent company, Ruaraka Diversified Investments Limited (RDIL) for an enterprise value payable in US dollars of around $74.6 million,” said Actis in the pitch for investment, as per Kepfic disclosures.
For the business park—developed through its subsidiary Kasarani Investments Holdings— the PE fund wants to raise $30 million (Sh4.2 billion), in splits of $14 million for debt and $16 million for equity.
The Garden City mall opened its doors in May 2015 after two years of construction, with owners later setting up the business park whose first phase was occupied in 2019 by listed brewer EABL.
In the pitch, Actis said it anticipates that earnings from the mall for the year ending June 2024 would stand at $7.94 million (Sh1.1 billion), which comprises income from rent, parking, utilities, marketing and service charges.
For the business park, forecasted income for the period is $2.27 million (Sh321 million), the disclosures show.
The developer also indicated that the income is insulated from forex losses, with the mall charging rent in hard currency.
“The mall’s expenses are paid in shillings, while revenues are earned in US dollars. This creates a natural margin and growth attributable to foreign exchange fluctuations, based on anticipated long-term appreciation of the dollar versus the shilling,” read the disclosures.
Actis’ pitch for the investments into its Garden City development were one of 54 infrastructure and alternative investment proposals presented to Kepfic by fund managers and project sponsors, with a total value of Sh770 billion.
The consortium shortlisted 19 for consideration from members, including the two from Actis.
The property sector had the most number of short-listed investments at five, valued cumulatively at Sh22.5 billion, while the infrastructure sector yielded the most value at Sh104.9 billion, from four projects.
The consortium, formed by pension funds looking to invest in infrastructure and alternative asset classes, called for the proposals at a time when returns from traditional asset classes have witnessed diminishing returns in a tough economy.
