Waterfront Karen Heads for Sh9bn Sale as Mall Boom Slows

The family of late billionaire Nelson Muguku is in advanced talks to sell The Waterfront Karen Mall in a transaction that could fetch up to Sh9 billion, according to sources.

Ken Obimbo, the property’s manager, recently confirmed that the sale process is underway, saying the family believes it has a serious buyer.

“There are still certain conditions that need to be met before the transaction is completed,” he told the Business Daily.

The move comes as investors reassess large shopping centres that once attracted billions of shillings in development capital during Kenya’s retail property boom.

For the Muguku family, the move marks a reversal of the investment strategy adopted a decade ago when it reduced its exposure to listed equities and channelled capital into property. That shift helped create The Waterfront Karen Mall, which was built by CJRE East Africa, a subsidiary of China Railway Group, at a cost of Sh3 billion.

Construction of the mall, which opened in 2018, came during Kenya’s mall boom, fuelled by expectations of a growing middle class and rising consumer spending.

The appeal of The Waterfront, which sits on 13.8 acres, including a 3.5-acre man-made lake, goes beyond the mall itself. The deal is also expected to include a 50-acre site in Karen earmarked for a development comprising apartments, offices and a hotel, although a man-made lake and swampy sections could limit its development potential.

“Utility of the land is dependent on the existing mall and the fact that there is a man-made lake and swampy area,” said a source familiar with the property.

As of publication, searches of NEMA and Nairobi County records found no environmental or development application for the undeveloped portion of the site.

The owners had previously marketed the undeveloped portion as a rare opportunity in Karen.

“The Waterfront is the only 50-acre bulk of land at the centre of Karen and its prestigious environs,” the property profile stated.

“The property features over 30 acres of undeveloped land; a goldmine that can be converted into an ultra-modern mixed-use development featuring high-end residential, commercial and recreational facilities – creating immense value for an investor,” it added.

The family first tested the market in April 2021, when a leaked document put the mall and 50 acres on sale for Sh20 billion. The figure was among the highest single-property asking prices made public in Kenya. David Muguku, managing director of The Waterfront, dismissed the reports as false, saying the mall remained a long-term investment. 

But the mall’s tenant mix has changed over the years. Game was the original anchor tenant before Shoprite signed a 10-year lease on November 26, 2019, only to terminate it about six months later, citing business losses. 

The Muguku family’s investment vehicles, Crossroads Limited and Karen Waterfront Phase Two Limited, sued Shoprite for Sh520 million in anticipated lost rent. In its defence, Shoprite disputed being the anchor tenant, arguing that Game Stores held that position because it occupied more strategic space in the mall. Naivas later took over the space.

READ MORE: Nairobi’s Empty Shopping Malls Echo a Sad Retail Story

The changing fortunes of shopping malls are reflected across the market. Knight Frank reported last year that occupancy across prime retail space under its management stood at 78 percent, as retailers and developers adjust to evolving shopping patterns.

“The outlook for Kenya’s retail real estate market in 2026 will be defined by a continued shift toward neighbourhood centres and mixed-use developments, with less emphasis on large regional malls,” Knight Frank said in its 2025 annual real estate report.

The rise of neighbourhood retail has also benefited supermarket chains that are moving closer to residential communities rather than relying solely on premium malls.

The possible Sh9 billion transaction also highlights a broader question facing family-owned fortunes built by Kenya’s first generation of billionaires: whether to continue holding landmark assets or unlock value as markets evolve.

Nelson Muguku, who died in 2010 aged 78, built a multi-billion shilling empire from Muguku Poultry Farm, property investments and his stake in Equity Bank.

At the time of his death, his estate was estimated at about Sh10 billion. 

The family’s other holdings include the former Standard Chartered Bank Kenya offices on Moi Avenue and Cross Roads Shopping Centre, about 850 metres from The Waterfront.

CK is yet to receive a comment from the family.

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