Focus on Nairobi as a major logistics hub has in recent years taken shape. Apart from the Standard Gauge Railway (line) that has opened up Nairobi into a major distributive centre, other logistics providers are fast moving into the city and its environs to take advantage of the road infrastructural network that is being constructed in efforts to gain entry into the Kenyan market.
In just two years, Africa Logistics Properties (ALP), a specialist in integrated property Investment company that develops, acquires and owns class-A warehouses in principal cities across Africa has completed such a facility a few kilometers from the city, the first of its kind in the East African region.
This project is situated within the Tatu Industrial Park, Ruiru, approximately 22km north from Westlands and the Nairobi CBD and 3 km from the Northern and Eastern bypass junctions, 5 km from the Thika highway.
“ALP North Development measures 50,000 sqm (538,196sqft) and comprises of modern grade-A international standard warehouses. It is the first modern distribution centre for the rental occupier market in Kenya and is designed to accommodate multi-tenants with space as low as 2,000sqm (21,528sqft),” Emma Siobhan, (the title in the company) said, adding that almost two-thirds of the space has already been occupied in the short period of existence, a testimony of the existing market gap for such a facility in the logistics chain in the country.
The company has already signed a long-term lease agreement for 2,000 sqm of this flagship project with Mapei East Africa, the Kenyan subsidiary of the Italian multinational group Mapei S.p.A, a world leader in the production of adhesives and chemical products for the building industry that had a consolidated group turnover in 2018 of 2.5 billion Euros.
Other main users of the ALP warehouses are multinational companies seeking grade-A supply chain facilities to enable cost-efficient entry into growth markets and/ or consolidation of existing poor quality warehousing into a purpose-built distribution hub.
Also, regional companies seeking distribution centres in order to expand locally and across borders and medium-sized local companies that require affordable and efficient international quality warehousing to grow their businesses in Kenya and the rest of Africa have seen ALP warehouses attractive. In Kenya, these include Kensta, Freight Forwarders Solutions, Copia, among others.
Added she; “The location of our sites and our dedicated, focused and nimble team that is based on-the-ground in Nairobi where the current projects are located has brought about this success in just a short period.”
Construction of ALP’s second project is already underway, having acquired 49 acres of industrial zoned land 25 kilometres west of the city along the Nairobi-Nakuru main highway. Planning for the project to construct up to 100,000 sqm of modern grade-A warehouse space in phases has already been done.
“The first warehouses are due for delivery in 2020. They will be sub-divisible down to 500 sqm and although of a lower specification than the units at ALP North, they will retain many of the important features, such as improved access and reliable power that are in high demand in the Nairobi market at present,” Ms. Siobhan said.
Road infrastructure and junction construction for the project has been completed. The site benefits from direct highway access allowing for logistics distribution to Nairobi and the Western Kenya cities and onwards to Uganda with the Southern and Northern bypasses being only less than 10 minutes drive from the site, according to Ms. Siobhan.
The location will benefit from the recently announced upgrading of Waiyaki Way and the Naivasha highway into a six-lane highway.
“We expect there to be greater demand for modern, high-specification warehousing but the focal areas of growth will be away from the historic industrial area to places on the outskirts of Nairobi such as Limuru and Ruiru. The investment in new or improved road networks around the city will play a big part in this transition,” Siobhan said.
The ALP management team has developed over 1.5 million square metres of modern warehousing in emerging markets over the last 10 years. The company is currently working with multinational and regional companies across Africa to develop modern grade-A logistics and distribution warehousing infrastructure.
ALP’s strategy is to identify demand-led investment opportunities within Africa that will generate strong returns for its shareholders through the development of industrial real estate projects whilst improving logistics and infrastructure in the markets in which ALP operates, according to Siobhan, a strategy that saw the company win Africa Property Investment Awards (API) – Best Industrial & Logistics Development in 2018.
“Modern designed warehousing should fit round a company’s processes and operations, not the other way round as is currently the case with poor quality dilapidated ‘go down’ c-class type warehousing in much of East Africa,” Siobhan said, adding that ALP warehouse specifications allow 3x the pallet storage density and increased operational efficiencies by reducing labour, transport and inventory management costs to deliver.
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