South Africa-based logistics industrial and logistics developer Improvon has started putting up mini warehouse units at its industrial park within Kenyatta family-owned Northlands City.
South Africa-based logistics industrial and logistics developer Improvon has started putting up mini warehouse units at its industrial park within Kenyatta family-owned Northlands City, Ruiru targeting medium sized firms that are in need of specialised logistics facilities.
Improvon’s facility, known as Nairobi Gate Industrial Park, already hosts two 5,000 square metre depots that the company set up to act as proof of concept for prospective tenants in the logistics and storage sector.
Improvon is now eyeing a mix of large bespoke facilities of up to 10,000 square metres each targeting large manufacturers and the mini units for smaller businesses.
“So far we have put up 19 mini units, with a total target of 40 in the first phase. Each is on average between 550 and 600 square metres in floor space, with a rental rate of about $6.40 (Sh855) per square metre,” Improvon Group Chief Executive Officer Stefano Contardo told the Business Daily.
He said a number of firms including Probakery and Mac Coffee Kenya have taken up some mini warehouses at the facility.
Demand for prime warehousing and logistics facilities in easily accessible areas has gone up recently in the country, pushing developers to put up new units outside of the traditional hub of Industrial Area where pathetic road infrastructure and parking space have become a bottleneck for transporters.
Listed property fund ILAM Fahari I-Reit said in its annual report for 2022 that developers are racing to match rising demand for space from Small and medium-sized enterprises (SMEs), agro-processors and fast-moving consumer goods firms.
Construction of bypasses around the city has opened up areas such as Ruiru (Tatu City and Northlands) and Limuru (Tilisi) for developers eyeing quick access to the Jomo Kenyatta International Airport and the standard gauge railway-linked inland container depot in Syokimau.
“Demand for quality industrial facilities across Africa remains strong, with investors attracted to the sector’s strong income profile and positive market fundamentals such as rising urbanisation levels, which is driving demand for urban logistics facilities,” said Fahari.
“Investor focus continues to be on strategically located assets, more so in locations that have favourable development policies such as special economic zone status.”