Britam takes cover in property as stock market loses shine

On July 20, Britam Holdings Plc opened to the public its newly built flagship property Britam Tower, marking a key milestone for the company in its diversification journey that seeks to reduce its reliance on the volatile capital markets.

The 31-storey office complex in Nairobi’s Upper Hill district, which is now ready for occupancy, has overtaken its neighbour UAP Old Mutual Tower as Kenya’s tallest building.

The Sh7 billion tower, which sits on 1.5 acres on Hospital Road, comprises two separate buildings: a 31-storey office tower and a 15-storey parking silo with an interlinking bridge at the top floor which offers alternative means of evacuation during emergencies.

It has a total lettable space of 350,000 square feet with 1,000 parking bays and is ready for occupation by diplomatic missions, multinationals, and financial institutions.

Speaking during the official opening of the building, Britam CEO Benson Wairegi said the financial services company’s decision to venture into property was part of a strategy meant to ease portfolio risk and exposure to the unpredictable stock exchange market.

Through its subsidiary Britam Properties (Kenya) Limited, the company is currently undertaking several major real estate projects in Nairobi – key among them a Sh12 billion mixed-use development in Kileleshwa.

READ: Britam bets Sh12bn on Nairobi shopping mall despite glut fears

Last year, the company told its shareholders that it would build a 140,000 square feet shopping centre in Kileleshwa to meet the demand for quality retail space in upmarket estates of Nairobi.

Mr Wairegi said the company was pursuing property management as its core business following the creation of a real estate subsidiary to push new deals.

“We want to build a mall because there is pent up demand in Kileleshwa and there are no malls in that proximity,” he said.

“The mixed-use development includes offices, serviced apartments and a hotel – all valued at approximately Sh12 billion, including land.”

The company, which has interests in insurance, asset management and property management, has acquired land worth Sh10 billion to facilitate its property development initiatives.

Britam is also building 11 floors of fully furnished and serviced apartments in Kilimani as it seeks to cash in on the rising demand for non-hotel based accommodation among business tourists visiting the city.

The Sh3.3 billion project, which is earmarked for completion in 2020, comprises 117 two-bedroom and 46 one-bedroom rental apartments located on a 1.6 acre piece of land on Nyangumi Road in Kilimani.

At Sh12,000 to Sh20,000 for a two-bedroom unit and Sh8,000 to Sh12,000 for a one-bedroom unit a night, the development looks quite promising considering that Nairobi is positioning itself as the regional business hub.

“The market will need at least 1,000 serviced apartments in the next three years and Britam Properties will help in bridging this gap,” Mr Wairegi told guests who attended the project’s ground breaking ceremony in June last year.

Cash-rich companies are increasingly diversifying into real estate development in a bid to meet the rising demand for housing in the country, which stands at nearly 2 million units.

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