You’ve probably heard about it. The long-awaited Garden City Mall will be opening on Thursday May 28, 2015. The journey to this project began almost 4 years ago when Actis, the investor, confirmed the real estate project situated north-west of Nairobi. But then, what is so special about this project? Why is everyone talking about Garden City Mall? But more importantly, how has the whole journey been since 2011 to date?


Thika Road Factor

The upgrade of Thika Road to Thika Superhighway, as it is commonly referred to, brought good tidings to the areas along the road. The expansion plans also brought tears to other retailers and businesses like Nakumatt Holdings. On November 1, 2008, bulldozers commissioned by the now defunct Ministry of Public Works and Ministry of Roads brought down the towering Nakumatt Thika Road branch. The losses arising from the destruction of the Nakumatt branch, then situated at the Roysambu roundabout was estimated at Kshs 500 million. The demolitions targeted establishments that were located in road reserves to pave the way for the expansion of Thika Road.


Nakumatt Thika Road in 2008 before demolition (Courtesy:

In a report by the African Development Bank (AfDB), the upgrade of the road was to serve a number of benefits. There would be “improved traffic flow into and out of” Nairobi and “improved access to social and economic centres” among other benefits. The concerns raised by some of the participants in the project included the need for “fair and prompt compensation where land and property may have to be acquired”. In a study titled The Thika Highway Improvement Project: Changes in the Peri-Urban Northern Nairobi Metropolitan Region by Renard Teipelke, some of the positive outcomes as far as business and job opportunities are concerned included:

  • Increased economic vibrancy
  • New investments by companies
  • New job opportunities
  • More middle-income customers
  • Improved supply of goods and services

The upgrade of the land would, however, affect the informal businesses negatively. For instance, AfDB took note of the various businesses that took place along the older Thika Road. For instance, jua kali businesses that specialised in “metal work, carpentry, dressmaking” thrived along the road. There were also roadside tree nurseries. Matatu termini had to be relocated too.

Within the last seven years, there has been a rapid conversion of land use “from agricultural to commercial and residential” in areas along the Thika Superhighway. However, Renard notes, this also came with “skyrocketing land and housing prices”. The areas affected by this phenomenon included Kahawa, Kasarani, Zimmerman, Githurai, Ruiru and Juja and the surrounding areas. It is no doubt that Nakumatt Thika Road branch’s location was strategic in serving this market.

Over time, after the demolition of Nakumatt Thika Road branch, retailers such as Uchumi, Naivas and other smaller, second-tier (mostly family-owned) supermarkets such as Cleanshelf, Home Depo and Kassmart emerged in the neighbourhoods above.


Demolition of Nakumatt Thika Road in 2008

In 2009, shortly after the November 2008 demolition of Nakumatt Thika Road, Uchumi Supermarkets opened their Uchumi Jipange branch opposite Kenya Breweries Limited targeting residents of estates such as Garden Estate, Thome and Gumba. In 2010, Uchumi Supermarkets issued a warning against buyers who might have illicitly bought its two parcels of land “next to Thika Road Baptist and the Roysambu roundabout”. It is on this 21-acre property that the retailer had plans to set up a mall that would match the competitors’ premises. The Uchumi Jipange branch was housed in much smaller premises.

Enter Actis

Actis Capital LLP is listed in the United Kingdom as a private equity group. The firm has a special focus exclusively on the emerging markets in Africa, Latin America and Asia. They have been touted as “one of the world’s biggest emerging markets private equity specialists.”



Actis is not new to Kenya. In 2006, they announced that they were investing in a 15,300 square metre office development along Ngong Road in Nairobi’s Karen area. The project was dubbed Nairobi Business Park (NBP). This particular project was to be part of the expansion of the 8,000 square metres of office space that Actis and the Nairobi Business Park Limited had invested in. The first phase was completed in March 2003. The expansion was estimated to cost approximately Ksh 1.90 billion.


Nairobi Business Park (Credit: Mentor Management)

The second phase, however, hit a snag when the Kenya Forestry Services (KFS) went to court blocking the development. KFS cited that the land which Actis bought from the Jockey Club of Kenya for Kshs 200 million was protected land since it was part of the Ngong Forest. It is said that the land was co-owned by the Jockey Club of Kenya and the Association for the Physically Disabled of Kenya (APDK).

The Junction Mall

Other than their flagship development along Ngong Road, Actis also financed and eventually exited the retail development we all know as The Junction Mall situated along Ngong Road.  The development comprised of 23,000 square metres of retail space. This development was pre-let to Nakumatt and Actis exited the development in 2010.


The Junction Mall (Credit: HorizonPost)


Thika Road Mall

The Thika Road Mall (TRM) was for a long time the largest shopping mall erected along the Thika Superhighway after the demolition of the Nakumatt Thika Road branch. It was built on a 6-acre piece of land adjacent to the Safari Park Hotel and United States International University (USIU). The retail development has approximately 300,000 square feet of lettable space with 5,000 square feet of a seating area in the food court and at least 700 car parking spaces. Nakumatt booked the retail space in TRM, a comeback to Thika Road five years later. The Kshs 400 million Nakumatt branch was opened on February 15, 2013, occupying 80,000 square feet of the development.


Thika Road Mall (TRM) – Credit: Dunhill Consulting

Back to Garden City

Whereas most of the developments we have discussed are shopping malls, Garden City is a mixed-use development. It was, for a long time, touted as the largest retail mall in East Africa. However, the Two Rivers project will most definitely take the trophy upon completion at 62,000 square metres of retail space. In 2011, Actis described Garden City development as a “mixed use, greenfield development.”


Garden City under construction (April 2015)

What is a mixed use development? A mixed use development refers to the use of a building or a set of buildings for more than one purpose. It can also be defined as “a development which comprises of two or more land uses, either comprised within a single building – horizontally or vertically – or multiple buildings of different uses within a distinct development site.” The term “greenfield” is used to describe undeveloped land in a given area. In the case of Garden City, the various land uses comprise of retail, residential and commercial property.

In 2013, prior to IFC committing to investing in the project, the project was to comprise of 35,772 square metres of lettable space for a two-storey shopping centre. This shopping facility can be, in future, be expanded by an additional 12,000 square metres. There will be 421 residential houses for sale. The developer also indicated plans of having office space and a limited service hotel in the development.

The retail space will take up 50,000 square metres area of the development. The mall will house the flagship store for Massmart’s Game Africa in Kenya. Game is a subsidiary of South Africa’s Massmart. Massmart is the same retail company that was in discussion with Naivas Supermarket in early 2014 seeking to acquire a majority stake (51% stake) in the Kenyan supermarket chain. Massmart Holdings is listed in the Johannesburg Stock Exchange (JSE). Wal-Mart Stores Inc owns 51% of Massmart. As of 2012, Massmart operated 105 stores in 12 countries in Africa. Massmart’s Game Africa store and Nakumatt will be the anchor tenants at the Garden City Mall.

The 32-acre piece of land where the Garden City Mall is built was purchased from the East African Breweries Limited (EABL) by the project proponent, Ruaraka Diversified Investment Limited. Initially, this land was occupied by old, run-down buildings belonging to the brewer.

On July 25, 2013, the Vision 2030 Delivery Board (VDB) granted the Garden City Mall the status of Vision 2030 Partner. The then Director General of the Vision 2030 Delivery Board, Mugo Kibati commended Actis and their partners in the development.

“Besides the sustainability and all positive attributes that Garden City prides itself in, I have been informed that phase 1 of the project will result in the creation of approximately 600 permanent jobs mainly targeting local Kenyans and over 300 jobs throughout the period of construction, the multiplier effect is enormous. The project is an example of the holistic initiatives that contribute towards our social, economic and political pillars that we are encouraging and fully welcome,” said Mugo Kibati.

The recognition by the VDB was ratified through the signing of a Memorandum of Understanding (MoU).

Project Financing

The entire Garden City Mall project is estimated to cost US$ 250 million. In January 2014, CDC Group PLC (CDC) and the International Finance Corporation (IFC) invested US$ 25 million and US$ 7 million respectively. CDC is what was previously known as the Commonwealth Development Corporation. CDC is an investment arm of the British aid known as Department for International Development (DfID) programme whose investments, including Garden City’s was heavily criticized in a feature in The Guardian.

Actis Africa Real Estate Fund 2 (ARE2) is a private equity fund committed to real estate developments in Sub-Saharan Africa. It is through this ARE2 fund that IFC, a financing institution affiliated to the World Bank Group, has an investment in Actis.

Prior to construction, IFC had plans to advance a loan of up to US$ 40 million. IFC would then provide additional funds in equity to the tune of US$ 9.8 million. According to IFC, ARE2 are “the sponsors of the Garden City Nairobi project” and IFC will be ïnvesting directly in the project” in two ways: first, as co-investors through the equity funding and secondly, as investors in ARE2.

“Garden City will provide vital jobs in Nairobi, and benefit the local economy through its supply chain,infrastructure and new opportunities. Few investors have an appetite for green-field real estate projects in sub-Saharan Africa, so this investment sends a strong signal of our commitment to Kenya’s development and our confidence in its economic potential.” – Dolika Banda, CDC Regional Director

“Garden City opens new business opportunities and creates jobs. Local businesses will supply goods and services and Garden City is working with IFC and CDC to promote entrepreneurship, including a market that will enable artisans to serve local consumers without bearing the significant overhead associated with permanent retail space.” – Oumar Seydi, IFC Director Eastern and Southern Africa

Actis was formed in 2003 out of CDC through a business process known as a demerger. A demerger is a business restructuring process where business activities are segregated. In this case, Actis was the emerging markets private equity arm of the CDC Group – which is the sponsor of Actis investments. Through this, CDC Group ceased making direct investments and Actis became one of its fund managers – together with Aureos, which was demerged or spun out earlier in 2001 from CDC.

CDC began making investments through the two fund managers: Actis and Aureos.

During the restructuring, DfID held 40% of Actis and 60% was sold to the Actis management team which consisted of 13 individual partners and 12 overseas corporate partners in July 2004.

CDC was first established in 1948 as the Colonial Development Corporation.  52 years ago, it was renamed Commonwealth Development Corporation after independence of the countries under the British colonial rule.

Starting July 2004, CDC, a government-owned development finance institution, became a public limited private equity company fully owned by DfID. From this time, CDC’s role was to provide “loan finance to private businesses in developing countries” both directly and indirectly with the aim of contributing to “economic growth and poverty reduction in the developing world”.

On May 1, 2012, the British government announced that they had sold off the 40% stake it held in Actis “in return for a share in the future profits of Actis’s fund.”

Investor Exit Strategy

In investments such as the many where Actis has financed, the investors usually do not plan to hold on to the investment for too long. Private equity investors usually aim at earning their profits usually within 5 to 10 years then they cash out by selling off their interest in the venture. It is a way of offloading an investment.

In July 2013, James Hoddell, CEO of Mentor Management, indicated that investors of the Garden City project had plans to list the development as a Real Estate Investment Trust (REIT) at the Nairobi Securities Exchange (NSE). The objective was to obtain the best returns on their investments.

In projects where Actis has been involved, investments have been held for between four and 8 years. After the sale, Actis (or any other fund manager) would return any net profit and the capital invested to CDC.

Project Team

The team that has been heavily involved in the development consists of the following among others:

Developer: Actis Property East Africa Limited (a company controlled by Actis which was registered in Mauritius on August 17, 2011)

Project Manager: Mentor Management (Actis has a controlling stake in Mentor Management)

Development Manager: Aspire Development Management Limited UK

Local Architect: Triad Architects

Lead Engineers (Civil, Structural, Mechanical & Electrical): Arup

LocalEngineers (Civil, Structural, Mechanical & Electrical): Howard Humphreys

Lead Architect: Leonard Design Architects (UK)

Quantity Surveyors: YMR Partnership & Davis Langdon

Letting Agents (in Kenya): Knight Frank

Letting Agents (in South Africa): Broll


Valid Dreams – Life at Garden City

Just in case you are like me and you want to have a slice of an apartment, just know that phase 1 was sold out – within 12 months. I called Violet, the sales manager at Garden City Village, and asked her the prices for the phase 2 apartments which are being sold off-plan. But before we get to the prices, we need to validate them and our dreams too.

The residential units come with Grohe sanitary fittings of the highest standard possible. The doors are made of solid mahogany and the floors are made of solid bamboo wood strips. You’ll also get a designer kitchen and high quality fitted wardrobes. Garden City Village, as they call it, will have a heated swimming pool and a host of enviable security and recreation features.


Garden City Launch Promotional Flyer

So back to the prices. To own the standard 2-bedroomed apartments you will have to part with around Kshs 26 million. The duplex 2-bedroom apartment goes for roughly Kshs 31 million. There are also 3-bedroom apartments with the standard ones going for Kshs 40 million with the duplex ones around Kshs 47 million.

So much for the burgeoning upper middle class.

(Photos Credits: Garden City Mall & Kevin O.)

UPDATED ON: May 28, 2015

  • Project financing updated to reflect the relationship between CDC Group and Actis
  • Investor exit strategy updated to reflect the investment holding period in Actis investments
  • Back to Garden City section updated to show the project proponent
  • Project team section updated to show that Actis Property East Africa Limited is registered in Mauritius and it holds a controlling stake in Mentor Management
  • Triad Architects website updated to


Garden City Mall Opens Its Doors
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