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Kenya warehousing market defies pandemic to register growth – KBC | Kenya’s Watching



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Modern warehousing complexes continue to receive increased demand from occupiers due to increased intra-regional trade and e-commerce activity over the last few years.

According to Knight Frank’s Kenya Market Update for the second half of 2020, Kenya Warehousing Market witnessed positive growth despite the coronavirus pandemic that negatively impacted the demand for office space and prime residential properties.

At the peak of the pandemic, new, well-located smart warehousing meeting international standards were opened while many more are under construction.

Phase 1 of Africa Logistics Properties (ALP) second Grade-A logistics and distribution park, ALP West located in Tilisi Logistics Park, were opened in October.

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The modern warehousing complex, which has a footprint of circa 83,958. sq. ft, is 20% let and is targeting small and medium-sized enterprises (SMEs) with smaller sized starter units of 5,000 sq. ft. The remaining six phases of the 1,076,390 sq. ft warehousing complex are expected to target larger occupiers.

In July, Cold Solutions Kenya Limited announced plans to construct a Ksh 7.5 billion cold storage facility in Tatu City. The 161,459 sq. ft facility, will sit on 6 acres and is expected to be completed by 2022.

Investment in cold storage is still in its infancy in Kenya, although the niche subsector is poised for growth as a result of an e-commerce expansion into the grocery business.

In October, recently opened Nairobi Gate Industrial Park, which is located off the Eastern Bypass, entered two lease agreements with Kentainers Limited.

Mlolongo, in Machakos County, continues to attract investors for storage and logistics facilities due to its strategic proximity to Nairobi and JKIA, together with key infrastructure improvements such as the SGR and the Inland Container Depot (ICD)

Scania East Africa Limited commenced construction of its Ksh 1 billion facility in Mlolongo over the review period, which is expected to be completed in 2021.

Mauritius based Real Estate Income Group Grit is currently in the process of finalising a Ksh 4 billion sale-and-leaseback warehouse from consumer goods manufacturer Orbit Products Africa.

The warehouse is located in Mlolongo, on a 20-acre land parcel adjacent to Grit’s Imperial Health Sciences facility.

The Income Group announced plans to expand its logistics presence by constructing an additional 109,167 sq. ft of warehousing space in Mlolongo. Construction is expected to commence in 2021 and be completed by 2022.

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