VIPINGO LIFESTYLE CITYInvestment Opportunity

Z e r o i n g i n t o V i p i n g o R e g i o n O v e r v i e w

KILIFI COUNTY

With an estimated population of 1.5 million spread on 12,609 km2, Kilifi is the largest county in the Kenyan coast boarded by Mombasa, Kwale, Tana River and Taita Taveta counties. The county’s key economic activities are agriculture, fishing and tourism. In agriculture, the locals practice beef and dairy farming and grow both staple and cash crops including maize, cashew nuts, tomatoes, cassava and mangoes among others.

Kilifi welcomes approximately 30% of the total number of tourists who visit the Kenyan coast annually with key attractions being Gedi Ruins, Vasco da Gama Pillar, Marine National Park, Mnarani Ruins, Arabuko Sokoke Reserve and multiple sandy beaches. The ready market for fish driven by the county’s hotel

industry has positioned fishing as a main economic activity with sea food being a delicacy for tourists. Additional economic activities include harvesting sand extracting minerals such as limestone and gypsum.  These economic activities are reflective of the economic activities also practiced in Vipingo, a coastal town in Kilifi County, 35 kms from Mombasa CBD. Tourist attractions are centred around the main beaches – Kuruwitu and Vipingo while agriculture is mainly practiced for sustenance with large-scale commercial agriculture centred in sisal farming. Accommodation largely consists of informal settlements, guest houses or beach houses with a limited availability of quality residential options.

Distance from Mombasa CBD

Population Estimate

of the total number of tourists who visit the Kenyan coast visit Kilifi

35 KM

1.5M

30%

Population Estimate

V i p i n g o D e v e l o p m e n t

The site is in the Kilifi County, about an hour drive from Mombasa center and 20 min from the exit of Mtwapa. It sits on 10,254 acre

The development comprises residential, commercial, hospitality, industrial, health care and institutional zones all supported by an urban environment, high quality infrastructure and state of the art amenities and services. Spread across 10,254 acres, Vipingo Development is set to become one of the most

The development is serviced with daily, direct flights from Wilson Airport in Nairobi, as well as through the regional airports of Malindi and Mombasa, which are both about 90 minutes by car from Vipingo.

SITE LOCATION

1 Hour

10,254from Mombasa center

a c re t h a t V i p i n g o Develpment sits on

M a r k e t A s s e s s m e n t a n d V a l i d a t i o nThe key strength is the size of the development and the Mombasa Malindi Highway while the opportunity arises as Mombasa is already congested and the synergies in the development

• The site is accessible to Mombasa-Malindi highway

• Good size to create a new city, and develop a self-sustaining scheme

• Will benefit from the development of the industrial park creating a self-sustaining demand

• The proximity to Vipingo Ridge, local villages and beach villas will provide initial demand

• Residential units are developed by Kenya’s foremost master developer Centum Real Estate

• Developing a new city is a relevant target as Mombasa is congested

• Expansion of the Mombasa Malindi highway to dual carriage-way will enhance site accessibility

• Mixed development allows for leveraging of synergies

• Opening of the Ronald Ngala Utalii College and development of the area will generate a sustained demand

STRENGTHS & OPPORTUNITIES

OPPORTUNITIES STRENGTHS

SO

KEY MACROECONOMIC OVERVIEW FOR THE REGIONM a r k e t A s s e s s m e n t & V a l i d a t i o nMombasa’s GDP stood at USD 6.28Bn in 2017 and is estimated to be USD 8.59Bn in 2022.It is expected to grow by 6.8% year-on-year.

MOMBASA POPULATION BREAKDOWN MOMBASA REAL GDP BREAKDOWN BY SECTOR

Mombasa has extensive expansion underway at the port and is earmarked as one of the special Economic Zones(SEZ) and will thus become an attractive destination for FDI

43.77%

12.68%

1.17% 1.82%

8.87%

31.70%

0-14

15-1920-39

40-59

60-6465+

23.77% 21.83%

15.03%

25.35%

13.25%

0.77%

Agriculture

Transport & CommunicationConsumer Services

Industry

Financial & Business ServicesPublic Services

The mixed-use development will create centrality with an aim to be a city. The envisioned lifestyle city is a residential-led development with a ‘live, work, play, environment in an appealing, natural setting.

& D i f f e r e n t R e a l E s t a t e U s e s O v e r v i e w M a r k e t A s s e s s m e n t & V a l i d a t i o n

ATTRACTIVENESS

An opportunity to develop residential assets catering to a wide range of family incomesRESIDENTIAL

Small convenience retail centers can cater to the existing and future population A quality neighborhood shopping center can attract retailers with an appropriate tenant mix.RETAIL

Provide many activities to differentiate itself with a ‘live, work, play’ startedy. Inherent seasonality of Mombasa and environs limits the potential to small facilities

LEISURE & ENTERTAINMENT

With limited demand and sufficient supply in town, the location is not competitve enough. However small units can be offered to cater to the local demand in the service sectorOFFICES

There is an opportunity to develop first and second grades education facilities to cater to the need of the future population.EDUCATION

Due to the majority of hospitals running at near full capacity both in the public and private sector, it is recommended that the project include a regional hospital as well as some clinics.HEALTHCARE

STRONG POTENTIAL LIKELIHOOD OF A POTENTIAL NO POTENTIAL

ASSET CLASS REVIEW OPPORTUNITY

K e y D e m a n d D r i v e F a c t o r sN a r r o w i n g d o w n t o r e s i d e n t i a l D e v e l o p m e n t s

RESIDENTIAL

Households have had a sustained growing demand from 293,000 units in 2012 to 349,800 units in 2017 at a CAGR of 3.6% putting pressure on existing households in Mombasa

UNIT TYPEFINISHING &

LAYOUT

FACILITIES & SERVICES

INFRASTRUCTURE & URBAN

ENVIRONMENT

ACCESSIBILITY & PARKING

PAYMENT PLAN

High quality material & finishes, balconies,

large windows. For mid-low end to

affordable: minimum level of finishing with

discounted prices

Provide high quality environment

promoting walkability and

providing reliable services

Provide flexible payment plans

Mainly 3-bedroom with a few 2- or

4-bedrooom depending on the

segment

Provide quality amenities, shops

and services to cater to residents’ needs

close to their homes

Two parking bays per unit and additional visitor

parking

Ty p i c a l P r i c i n g o f Ta r g e t M a r k e tRESIDENTIALAverage sales prices among mid- to high-end apartments and villas are approximately USD 800 to USD 1,350 per sqm and prices in Vipingo Ridge are within this range.

• The market is price driven, although clients also expect good quality. Prices per sqm rarely exceed USD 1,000, and even on the high-end market good quality products can be found for less than USD700 per sqm.

• These rates have been steadi ly increasing over the past five years. However, current developments in central areas manage to offer prices comprised between USD600 and 750 per sqm, swimming pool included.

Nyali

Kizingo

Tudor

Mkomani

Shanzu

Mtwapa

Bamburi - Utange

Vipingo - Kikambala

Vipingo - Palm Ridge (Centum)

Vipingo - Awali (Centum)

AREA

1,200 - 16001,100 - 1,500

800 - 1,3001,000 -1,600

1,200 - 1,8501,600 - 2,200

1,300 - 1,7001,400 - 1,900

1,400 - 1,7001,350 - 2,200

1,400 - 1,8001,600 - 1,950

500 - 800500 -1,000

1,300 - 1,6001,550 - 2,350

445 - 570

620 - 930

AVG SALES PRICE*(USD/SQM)

Affordable-Mid end to Mid - High end

Affordable-mid endTo mid high end

Mid - high end

Mid - high end

Mid - high end

High End

Affordable to Mid end

Mid - high end

Affordable - Mid end

Mid - High End

TARGETMARKET

1,300 - 1,8001,500 - 1,900

640 -1,000800 -1,250

950 - 1,5501,400 - 1,900

900 - 1,4001,200 -1,750

1,100 - 1,5401,200 - 1,600

1,100 - 1,5501,200 - 1,600

80 - 30050 - 400

1,100 - 1,4001,300 - 2,000

330 - 450

AVG RENTAL RATES*(USD/MONTH)

M a r k e t D y n a m i c s RESIDENTIAL

Average Apartment rates are USD800-1350 with lows of USD600-750/SQM. Vipingo offers USD445-570 thus below market. Absorption rate is 100 units with 3-5 units per month

• Apartments represent a greater share of the overall residential supply in Mombasa.

• Substantial supply of high-end projects between Serena and Vipingo. On middle-low end to affordable segments, supply is concentrated in Bamburi and Mtwapa

• Increasing population and household income are expected to favorably impact demand for residentials

• High costs of mortgage facilities limit demand inspite of a 2 million deficit

• There is a higher demand for better quality residentials with attractive prices and service charges.

• Increased demand of 2-3 bedroom around Vipingo.

• Average sales prices among mid- to high-end apartments & Villas are 800-1350 per SQM

• The rates are increasing with central areas offering 600-750 per SQM.

• Affordable housing can be sold at prices starting from USD 400 per sqm.

S U P P LY D E M A N D P E R F O R M A N C E

Vipingo offers a diverse offering of residences with bungalows and maisonettes in its Awali Estate and 1, 2- and 3-bedroom apartments in its 1255 Palm Ridge precinct. 1255-Palm Ridge, a gated community comprising a mix of 1, 2 and 3-bedroom apartments. The development is set to have 1,255 apartments on completion with phase 1 which is sold out comprising 330 units.

V i p i n g o R e s i d e n t i a l U n i t s O f f e r i n g 1255 PALM RIDGE

Product mix

Phase 1 product mix(Affordable Housing Product)

Total project outlay

Sources of funds

Status

Phase 1:330 Units

Units Sold 342

Construction of the apartments commenced earlier this year and is scheduled for completion next year. Amenities within the estate include open green parks, reliable water supply, ample parking, playgrounds and swimming pools. Residents of both precincts will have access to Vipingo’s beach which will be fully fitted with a beach club.

Awali boasts of amazing amenities including green parks, playgrounds, jogging tracks, swimming pool and children play areas, all in a secure controlled development. Awali has so far registered sales of 65%. A few metres from Awali estate is the 1255-Palm Ridge, a gated community comprising a

V i p i n g o R e s i d e n t i a l U n i t s O f f e r i n g AWALI ESTATE

Product mix

Phase 1 product mix(Affordable Housing Product)

Total project outlay

Sources of funds

Status

90 bungalows62 maisonettes

40 bungalows @ USD 129k32 maisonettes @ USD 169k

USD 15 million

SSales – 28%, Equity – 27%Debt – 45%

Phase 1 under construction

Phase 1:74 Units

Units Sold

29

mix of 1, 2 and 3-bedroom apartments. Amenities within the estate include open green parks, reliable water supply, ample parking, playgrounds and swimming pools. Residents of both precincts will have access to Vipingo’s beach which will be fully fitted with a beach club.

The low levels of retail supply and increasing middle class create a positive sentiment towards a growing demand. The performance of Mombasa is on the rise, with occupancy rates and rental yields becoming more competitive

OVERVIEW V i p i n g o R e g i o n R e t a i lK e y D e m a n d D r i v e F a c t o r s

P r o v i d i n g s u f f i c i e n t a n d dedicated parking for the retail development in order to mitigate the potential accessibility and congestion risks

PARKINGPROVISION

QUALITY & DESIGN

LOCALIZATION

CRITICAL SUCCESS FACTORS

TENANT MIX

Strategic location within the city to reach the right audience and along major roads to increase visibility and access to the proposed retail offering

Securing the correct mix of tenants which responds to the needs of the surrounding catchment population, and the demand of local businesses.

Providing good quality retail shops with modern exterior and interior design as it is increasingly demanded by the catchment population

RETAILK e y C h a r a c t e r i s t i c s & Ta r g e t M a r k e t E x p e c t a t i o n s

Nyali Centre 22,500 2016

City Mall 20,000 2010

Mtwapa Shopping Mall 6,000 2013

Nyali Plaza 5,700

Nyali Cinemax 5,000

Palm Breeze 1,400 2016

The Avenue 2,200 2017

Nova Mall 1,800 2015

Amal Plaza 1,500 2015

English Point 420 2016

Krish Plaza 1,100 2014

RetailFacilities

Size (SQMof GLA*) Completion

Airport Centre Mall 7,500 2018

Eden Towers 3,000 2018

Nyali Links Arcade 1,500 2018

Petrolink Gas Station Bamburi 1,600 2018

Petrolink Gas Station Nyali 800 2018

RetailFacilities

Size (SQMof GLA*) Completion

City Mall 20,000 95% 175-550

Nyali Centre 22,500 85% 195-220

Amal Plaza 1,500 75% 105-170

Airport Centre 7,500 75% 105-165Reservations

IndicativeRentals**

RetailFacilities

Size (SQMof GLA*) Occupancy (%)

The market for formal retail space in Mombasa is estimated at 80,000SQM. The performance is on the rise, with occupancy rates and rental yields becoming more competitive.

Notably, the design of these facilities is not in line with classic international retail principles. Malls distinguish themselves based on the quality of tenants they are

attracting. A good tenant mix will offer banks, pharmacy, fresh products, restaurants and a wide range of local services.

* Estimations based on JLL research

D e m a n d & S u p p l y F a c t o r s D r i v i n g P r i c i n g S t r a t e g y

AVA I L A B L E O P P O RT U N I T I E S F O R V I P I N G O

RETAILCity Mall and Nyali center account for 25% GLA. The demand is resilient with potential for expansion with rising disposable income. The first phase are a potential opportunity

• Existing stock is at 80,000 SQM GLA. City Mall and Nyali center account for 25% of GLA.

• The rest of the stock is small retail and business plazas and first floors of office buildings

• An estimated additional supply of 15,000 SQM to be delivered by the end of 2018

• Demand proven to be resilient despite the political situation and difficulties encountered by Nakumatt.

• Mombasites have slightly higher purchase power than Nairobians but remain conservative in their shopping, however, the increase in Disposable income confirms potential for expansion

• Large existing gaps in central areas start being filled with new developments and probable expansion of one existing mall• Rents and occupancy rates to remain resilient• With growing population, shopping supply between Mtwapa and Watamu needs to be met• First phase of the development and affluent surroundings are a potential opportunity

• Mall Rental ranges USD 125-500/SQM/year plus USD 50/SQM/year service charges with 10% vacancy rates

• Retail plazas have rental levels between USD 80-185 /SQM/year plus USD 20-25/SQM/year service charges with 15%-25% vacancy rates

S U P P LY D E M A N D P E R F O R M A N C E

VIPINGO

• Par t of V ip ingo’s master p lanned development includes Vipingo Leisure Centre, a retail mall within the development. The mall will comprise retail, food & beverages and other line shops as well as a clinic facility.

• Awali, 1255-Palm Ridge and the Vipingo Leisure Centre form part of the Vipingo Lifestyle City, a 300-acre zone within the larger Vipingo Development. The lifestyle city is set to have a vibrant urban mix comprising residential , commercial ,

educational, entertainment and hospitality developments.

• The mall & petrol station is scheduled to commence construction before 30th September 2019. The mall is 10,500 sq.m GLA with 31 shops and the anchor Tenant signed (Chandarana) while the ground Floor Fully Booked

• Construction is scheduled to be completed in 24 months.

R e t a i l O f f e r i n g

RESEARCH DONE BY: CENTUM RE RESEARCH DEPARTMENT & CAROLINE ORAO

centumre.co.ke