Centum for US $900m Marina in Uganda
Centum Investments, the largest listed investment company on the Nairobi Stock Exchange (NSE) and cross listed on the Uganda Securities Exchange (USE) is on an ambitious drive to attract investors for its US$900m Luxury Marina, in Garuga, 20kms along the Kampala-Entebbe highway. The project is expected to be commissioned at the second quarter of 2014 with the initial phase, expected to cost about US $100m.
The Marina will be on the shores of Lake Victoria, with quick access to the Entebbe International Airport and Kampala by lake and road. Fred Murimi, the Centum Director of Corporate Affairs said that this was an “opportunity for investors” to place their money in a “premium tourist destination in Uganda.” He said this on the sidelines of the recently concluded Uganda Investment Forum.
Centum holds about US $250m in assets, spread out in private equity stake, listed companies and non-listed companies including Coca-Cola Kenya and UAP Holdings. The Pearl Marina will be their first direct investment in Uganda (Pearl Marina Estates Limited), and at that, their second real-estate project in East Africa.
“There is acute demand for well planned housing in Uganda, and we recognise this. For us this is an opportunity that can guarantee a return on investment,” Murimi added. “The development provides premium tourism and residential facilities including hotels, conference facilities, luxury apartments, villas, a golf course, marina, hospital, international school, modern office park and a retail centre,” reads a document on display at the Centum stall during the investment conference.
Murimi further notes that “with or without investors, the first phase will go ahead. Our aim is to unlock the value of the site in order to attract more investment.” The project is expected to cover 300 acres of land. The hugely ambitious project requires funds, which Centum has in those ranges. Even the initial US$100m for phase one, will come from retained earnings, some potential exit windfalls from some companies, sale of shares and commercial bank debt.
In hindsight though, the investment company is projecting other investors to join in the first phase. Murimi revealed that there is interest from a host of local funds, within East Africa and other foreign funds. The first phase is expected to be completed by end of the second quarter of 2016.
The challenge for Centum though, lies in unlocking the potential for long term financing from the local Ugandan market which is yet to have a highly competitive pension sector on one hand, and the capital markets have only recently opened up the opportunity for trading of more debt, through Asset Backed Securities. The Centum share price on Friday closed 1.16percent lower to Kshs21.25. Year-on-year though, the share price, according to the Bloomberg NSE quote, has generated a return of 49.65percent.