Centum Real Estate books Sh1.1bn house sales in 6 months

Centum Real Estate books Sh1.1bn house sales in 6 months

James Mworia, Group CEO of the Investment firm company /FILE Nairobi, Kenya, Nov 26 – Centum Real Estate Limited has earned Sh1.1 billion revenue from the sale of houses in the six months ended September 2021.

The strong sales helped Centum Real Estate to record an Sh144 million gross profit from residential units in the first half of the year. The company further recorded Sh 172 million in revenue from the sale of development rights.

“Our current projected pipeline has a profitability level of Sh 4 billion, out which we have recorded Sh 260 million in our income statement. The balance of Sh 3.7 billion will be recognized progressively moving forward, as we complete the projects and handover the houses”, said the Centum Real Estate Managing Director, Samuel Kariuki.

The Company also reported that it has sold Sh 5.5 billion in development rights on its land banks to date against which it has collected Sh 3.6 billion in cash.

“The realized cash profit from these sales is Sh 4.8 billion, which was largely recorded in prior years as revaluation gains. The sales effectively convert those revaluations into distributable revenue reserves”, noted Kariuki.

Subsequent to 30 September 2021, the Company announced that it has entered into further transactions of Sh3.4 billion in the sale of development rights on its land banks.

The half-year numbers show Centum Real Estate’s balance sheet is now valued at Sh40.9 billion, comprising Sh28.6 billion investment property, half a billion shillings’ worth of completed residential units, Sh6.6 billion houses under construction, Sh1.4 billion cash and cash equivalents, and Sh3.6 billion other assets.

“The two primary value drivers in our business are the sale of development rights within our land banks and development and sale of residential projects. We have made significant progress on both fronts in Kenya and Uganda as evidenced by the quantum and value of development rights sales, size of residential projects pipeline and sales, cash collections, and the receivable on sales,” said Kariuki.

Centum Real Estate is currently holding 8,400 acres out of a total holding of 10,639 acres in 2019, representing sales of 2,239 acres over the two years.

The transactions, Kariuki noted, have been closed at prices higher than the book value, justifying the valuation of Centum Real Estate’s land holdings.

“Our unsold stock of development rights in Kenya and Uganda is currently valued at KES28.6 billion, which valuation is validated by transactions over the last two years,” said Kariuki.Centum […]

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