NAIROBI, Kenya, Jul 2- Centum Real Estate Limited has reported a consolidated profit of Sh650 million for the year ended March 31 2021, driven by profit from residential units, sales development rights, and gains on investment properties.
Centum Real Estate defied the Covid-19 pandemic to record residential unit sale deposits of Sh1.8 billion in the year, a 20percent increase from Sh1.5 billion recorded in the previous year.
In September 2020, Centum Investment Company reorganised its real estate business by consolidating its entire real estate holdings, with the exception of its 58percent interest in Two Rivers Development Limited, under Centum Real Estate Limited as the holding company.
Centum Real Estate Limited is now the holding entity of four subsidiaries namely Vipingo Development Limited, Centum Development Kenya Limited, Uhuru Heights Limited and Pearl Marina Estates Limited, domiciled in Uganda.
“The effect of Covid-19 containment measures was an initial slowdown in residential unit sales in the first quarter of the financial year and operational disruptions in some of our sites, particularly in Uganda, but this changed in subsequent quarters and our average monthly cash collections have increased by 73% compared to the pre-Covid period,” noted the Centum Real Estate Managing Director, Samuel Kariuki.
Centum Real Estate completed the construction of two projects in Vipingo and Uganda, in addition to launching three new projects in Nairobi.
Two of the new projects attained the pre-set market validation threshold of 30% and their construction has commenced.
In the sales-led development model, Centum Real Estate seeks to pre-sell at least 30% of a project phase before ground-breaking.
Centum Real Estate had cumulatively sold 1,281 residential units with a total sale value of Sh11.5 billion as at March 31 2021, representing 63percent of the total units either completed, under construction or under market validation.
“These sold units have a profit potential of KES 2.2 billion, which is expected to be booked progressively from the financial year ending 31 March 2022”, noted Kariuki.
Currently, Sh3.7 billion had been collected as cumulative deposits, withSh7.8 billion being the cash due on the pre-sales.The deposits collected are accounted for as deferred revenue liabilities on the balance sheet, with the revenue being recognized in the income statement when construction is completed, the unit has been handed over to the buyer and is fully paid for.“We expect the significant proportion of the KES 11.5 billion, together with new sales from the current projects, to be recognised progressively over the next two financial […]