Why Kenya's Most Prominent Buildings are up for Sale
The government notes that privatization would help make the Kenyan economy more responsive to market competition.
REBP
The inflation rate in Kenya and the high cost of living have caused a dent in the pockets of many people in Kenya. Corporations and government entities have not been spared by the tough economic times. The result is a surge in the number of famous buildings in the country that are being put up for sale.
The buildings that are up for sale include the Kenyatta International Convention Center (KICC), the Old Mutual Tower, and the Tembo Co-op Building. KICC is among the government-owned institutions in a bid by the government to raise additional revenue.
Some of the other parastatals targeted in the state privatization programme include the National Oil Corporation of Kenya, Rivatex, Kenya Seed Company, and the Kenya Pipeline Company. The government also anticipates that the sale of state entities will help reduce the demand for government resources in line with the many competing needs.
According to the Treasury, privatization would help make the Kenyan economy more responsive to market competition and market forces as there would be more participation by the private sector. It is estimated that the government could earn Ksh30 billion a year courtesy of the sale of troubled parastatals.
KICC
KICC stands as one of the tallest buildings in Kenya. In a state privatization programme, KICC has been listed among the parastatals that will be sold to private investors. KICC is currently valued at Ksh6.25 billion, and it is anticipated that its sale will generate the much-needed revenue that the government needs.
Recently, the High Court suspended the intended sale of 11 parastatals, including the KICC, following an application by the Orange Democratic Government (ODM) challenging the intended sale. Justice Chacha Mwita found that the petition by the opposition brought up substantial legal and constitutional issues that required the court’s examination. The opposition has submitted that the decision on whether or not to sell the parastatals should be subjected to a referendum as the entities in question are of crucial importance with assets worth Sh200 billion.
Treasury argues that KICC continues to rely on support from the State Exchequer for its recurrent operations, hence the need to dispose of it.
[File image of the Kenyatta International Convention Centre(KICC) Photo/Courtesy.]
Old Mutual Tower
Valued at Ksh5.5 billion, the Old Mutual Tower in Upper Hill has been put up for sale by Old Mutual Group Holdings. Following years of loss-making and an increase in borrowing, Old Mutual has found itself in need of settling the debt service cost, hence the move to sell the Tower. Old Mutual Group has had to contend with an over 96 percent increase in the costs of financing as a result of the depreciation of the Kenyan shilling. Old Mutual Tower also serves as the company’s headquarters and is currently the company’s most significant investment property. Constructed for Ksh5 billion and standing at a height of 163 meters, the Old Mutual Tower is one of the tallest buildings in Nairobi.
[File image of the Old Mutual Tower. Photo/Courtesy.]
Tembo Co-op Building
Tembo Sacco has joined the list of companies selling their buildings after it put the Tembo Co-op building located along Moi Avenue up for sale. The seven-storey building has been operating on a leasehold term of 99 years since July 1, 1985. The price of the building has not yet been disclosed. The company has shied away from revealing the reason why the building is being put up for sale. The Tembo Co-op Building is located in a strategic position within the Nairobi Central Business District.
[File image of the Tembo Co-op Building. Photo/Courtesy.]
Over time, other famous buildings have also been put up for sale, including the GS Grand Hotel along the Thika Superhighway. InterContinental Hotel has also had its movable assets put up for auction as the owners look forward to leasing out the property or making it a mixed-use property.
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