Centum CEO James Mworia. PHOTO | COURTESY Centum Investments Co. PLC is planning a stake sale of its property subsidiary as it seeks to unlock capital gains while reducing its exposure to the volatility of property prices.
According to group chief executive James Mworia, Centum is open to selling part or all of its stake in Centum Real Estate to rebalance its portfolio that is now concentrated in real estate.
The proceeds of the sale will be used to acquire private equity and marketable securities.
“The money raised will be reinvested in marketable securities and private equity to reach our allocation target in these two segments,” Mr Mworia told the Business Daily.
Centum invested Sh7.8 billion in acquiring and developing the assets under Centum Real Estate – which was valued at Sh16.6 billion in the year ended March 2021.
As a result of massive gains in land and property prices, Centum now holds about 63% of its Sh47.5 billion wealth in real estate – exceeding its target maximum of 55%.
“We have gone above the target not because of increased investment in real estate but because of the gains in the land and properties,” Mr Mworia said.
The rapid growth of the real estate portfolio has cut Centum’s allocation in private equity and marketable securities to 20.5% and 16%, respectively – trailing the target of 40% and 20%.
Most of the company’s real estate assets, comprising of land and residential houses, are concentrated in Nairobi, Vipingo in Kilifi County, and Entebbe in Uganda.
Properties in Nairobi include Riverbank Apartments, and Cascadia Apartments, while those in Vipingo include Awali Estates and 1255 Palm Ridge. In Entebbe, Centum’s properties include, Mirabella Residences, Riviera Town Houses, and 256 Bella Vista Apartments.
Centum Investments directly holds a stake in Two Rivers Development Ltd., which in turn holds a controlling stake in the Two Rivers Mall on Limuru Road in Nairobi.
