Bufallo Mall investor, Grit Real Estate Income Group is set to sell its 50 per cent stake on the mall at a value of Sh530 million.
This comes after the mall reported a loss of Sh271 million last year. The loss was attributed to the reduction of rents to the tenants who were enjoying low rent rates from other malls investments that were uprooting in major towns across the country.
The multinational Mauritius Group that is listed in London Stock Exchange (LSE) bought the stake from Buffalo Mall Naivasha for Sh450 million in April 2016.
In a 2018 year-end note, the firm stated that, “several opportunities to increase net asset value growth are currently being extracted from the portfolio. These include the sale of our interest in Buffalo Mall in Naivasha Kenya and the development of Phase two of our logistic warehouse in Nairobi on the back of tenant demand.”
With a gain of at least Sh70 million, the Grit Group is expected to sell its stake at a discount or at premium depending on the demand of the said property.
Tuskys retail chain is the anchor tenant in Buffalo Mall plus 37 other commercial renters and is fully occupied.
The Mauritius firm will, however, develop its Sh2.2 billion warehouse in Nairobi to phase two. As its only property in Kenya, the firm acquired the warehouse and later leased it back to pharmaceuticals distributor Imperial Health Sciences.
Buffalo Mall was financed by HF Group which is owed Sh448million.