Kenneth Mbae on How Centum Real Estate is Transforming East Africa with Smart, Green Cities

 Give us a brief overview of Centrum Real Estate—how it started, what it is today, and the Scope of your Business?

Centrum Real Estate is an investor and developer of large-scale mixed-use developments in East Africa. We are primarily a lifestyle business focused on enhancing productivity. An individual spends approximately 40% of their time at home, with a significant portion of that time spent sleeping. Therefore, it is important to be in the best possible environment.

Additionally, approximately 90% of a person’s day is spent in a real estate setup. If not at home, then at the office; if not in the office, then perhaps shopping, at an entertainment venue, in a hotel, conference facility, or meeting room. All of these involve real estate. Our goal is to support individuals in becoming the best versions of themselves and achieving maximum productivity within these environments.

We view lifestyle holistically from the home to the office, and we aim to enhance quality of life across these spaces. We deliver this primarily through housing. In addition to providing a living environment, housing also offers the opportunity to generate income, such as rental income, and contributes to the creation of wealth. These assets can also be passed down to future generations, contributing to both individual and national wealth across the region.

Centrum Real Estate was established in 1967 and has been operational for 57 years, consistently delivering real estate solutions across East Africa.

What kind of infrastructure does Centrum Real Estate develop? Is it Commercial, Residential, or something else? Please give us a detailed overview.

We develop model cities. We identify locations by studying demographic growth and infrastructure developments to predict where future urban expansion is likely to occur. We then acquire large tracts of land in those areas, install infrastructure, and develop the anchor project. The anchor project varies by location, it could be industrial, residential, a shopping mall, or a hotel.

Housing is a critical component of any development, so we provide residential spaces where families can live. We then invite other investors to develop the commercial elements of the city.

From this model, we identified a particular opportunity in housing. As a result, we have placed special focus on residential development, ranging from affordable and mid-market units to high-end housing within mixed-use developments that offer all the amenities a family would require. These developments are comparable to any found globally.

We also provide supporting infrastructure, including water supply, electricity, and wastewater treatment systems. Sustainability is a key focus to ensure reduced homeownership costs and enhanced quality of life. We incorporate green open spaces and parks for recreation.

Additionally, we have identified opportunities in providing serviced plots, fully equipped with the necessary infrastructure any developer would need. This significantly shortens the time required to acquire land and begin development.

What are your Competitive Advantages?

We are in business, and we run a commercially viable enterprise. However, our primary focus is on the customer, the end user in any model city. The majority of these individuals are tenants; they are the people who will live in the city and support its growth as it takes shape.

We develop products that are affordable for tenants from a rental perspective. If the rental price is affordable for them, we then assess whether it is also attractive to an investor. Most investors, particularly in Nairobi, are targeting rental yields of 9 to 10%. Nairobi currently offers one of the highest rental yields among comparable cities globally.

If the development can generate a 9% rental yield, it becomes attractive for banks to finance. Therefore, we create a financially viable product, and then we enhance it with a strong lifestyle component. This means ensuring that the quality of life in these residential neighbourhoods is exceptional, with world-class amenities.

People are increasingly prioritising health and wellness , seeking jogging tracks, walking trails, beautifully landscaped gardens, and state-of-the-art security. This is our first competitive advantage.

Second, we partner with financial institutions to provide financing to our investors. We ensure that our products are bankable, that those who purchase from us are bankable, and that even those who buy from them can also create value. We focus on the entire supply chain.

Third, we build more cost-effectively,delivering better quality products at lower costs than most competitors, and in prime locations. This combination of affordability, quality, and location gives us a competitive edge.

Despite these efforts, the demand in the region still far exceeds the supply. All developers in the country are collectively building fewer than 50,000 homes annually, while the demand exceeds 200,000 homes per year. We are only scratching the surface. It is now time to scale and deliver solutions at a much larger level.

Can you highlight some of your completed Projects?

We have projects in three locations across East Africa. In Nairobi, just two and a half minutes from the United Nations complex in Gigiri, we have Two Rivers—a 100-acre mixed-use development that includes the largest shopping mall in the region. We have completed the mall, residential units, hotels, and offices. It is one of our flagship projects and among the most popular nodes in the country. Occupancy rates for completed homes are between 98 and 99%, with a substantial waiting list. It remains a key focus area for ongoing development.

Along the Kenyan coast, about 35 kilometres from the Port of Mombasa, we have the Ping’o development. It is a mixed-use model city anchored by industrial activity. We have also developed the largest seawater desalination plant in the region, producing three million litres of water, currently unmatched south of the pyramids. The project addresses water needs and supports industries such as food processing and liquefied petroleum gas, which creates employment and stimulate the local economy. Workers reside within the on-site residential units.

In Uganda, along the shores of Lake Victoria, the world’s second-largest freshwater lake, we are developing Balmarina, a resort city with both residential and commercial elements. Over 500 residential units have already been completed, and development is ongoing.

We continue to explore opportunities for regional expansion, as the demand for housing remains high across East Africa.

What Ongoing Projects are you currently working on, and which ones are a Priority for Promotion?

We have several projects under construction, which we categorise into three segments.

First, affordable luxury homes are priced between $20,000 and $100,000. We have nearly 2,000 units under construction in Nairobi, including Mzizi, Cascadia, and Roft. We also have similar projects in Vipingo and Uganda. This segment includes affordable housing developments that are IFC-Edge certified, meaning they meet international green building standards.

Second, we have mid-market products, priced between $100,000 and $200,000. These are also under construction in all three locations: Uganda, Nairobi, and Vipingo. Many of these are almost sold out, and we are currently developing the fourth and fifth phases of the projects.

Third, we offer a high-end segment with units priced above $200,000. These developments make our locations aspirational and cater to a premium market.

We also address another need in the market, providing land within a master-planned development where buyers can follow development controls and build at their own pace. This option appeals to investors and homeowners seeking flexibility within a structured environment.

You mentioned Green Buildings and Infrastructure. Can you elaborate further on how this Supports Sustainability and What goes into that Concept?

Green infrastructure is the future and the right path for the planet. To explain it simply, it means living in an efficient building where water and power costs are significantly reduced.

For example, if your combined monthly utility bill is $100, you could save up to 30%. That equates to $30 in monthly savings, or $360 annually. In addition, buildings designed with larger windows allow more natural light into the home, improving the overall quality of life.

Using efficient materials also reduces maintenance costs. In essence, the total cost of homeownership decreases over time, continually returning value to the owner. These homes are more efficient in terms of energy and water usage, and they offer a better living experience.

Over a 10 to 15-year period, the return on investment is significantly improved. If the property is financed through a loan, owners may also be able to charge slightly higher rent due to the value added by green features. This is the direction the market is heading, and it represents a new frontier for real estate development.

What type of Buildings are being developed under the Green Infrastructure Concept—are they Apartments, Penthouses, or other types?

All the buildings we are developing are IFC Edge certified. This means that an external party uses IFC tools to verify our compliance. They also train our engineers, architects, and contractors to meet these standards.

Our townhouses, apartments, and bungalows, every product we develop, is moving towards Edge certification. They are all designed to be green and sustainable buildings.

What types of Buildings do you develop? Is it just Apartments, or do you also build Penthouses or other kinds of homes? And on the Commercial side, what kind of Developments are you involved in?

On the residential side, we focus on low-density housing. This includes townhouses, maisonettes, and villas. Under apartments, we offer medium-density developments, typically ground plus four or ground plus eight floors—as well as high-rise apartments that range from ground plus ten to ground plus twenty-five floors. We participate across the full spectrum of housing.

On the commercial side, we are involved in office developments, industrial facilities, and some retail, including shopping malls.

What are your Medium- to long-term Priorities for the Company?

Our plan is to expand across the region and into other towns within Kenya. Kenya has a population of 51 million and about 13.8 million households. With an annual population growth rate of approximately 3%, there will continue to be significant housing demand into the foreseeable future. Many people are migrating from rural to urban areas in search of economic opportunities, but housing supply is lagging behind.

There is still room for growth in Nairobi, and we see opportunities in other major towns. The same applies to Uganda, with a population of 48 million and rapid growth. Beyond our current location in Entebbe, we plan to expand into Kampala and other urban centres.

Housing needs across Africa are similar. We are also exploring opportunities in Tanzania, the Democratic Republic of Congo, Ethiopia, and other regions. Our expansion will be guided by market demand, and we are actively pursuing this growth.

What would you like to say to Investors who are either looking at East Africa or have not yet considered the Region, particularly in Real Estate?

In East Africa, demand for housing far exceeds supply across all segments. For example, in Kenya, there is a housing deficit of 2 million homes. Annual demand stands at around 250,000 units, while the supply is estimated at just 50,000. The biggest challenge in business is often to create demand. In this case, the demand already exists, it is the supply that needs to catch up, which is a positive challenge.

Many buyers are purchasing off-plan, meaning they make payments during construction. This lowers capital intensity for developers. Banks are also offering mortgage financing to their customers. What developers need is a simple funding line to shorten the development cycle, from 36 months to 9–12 months using modern construction technologies.

The returns are attractive and often above market average. Properties can be sold or rented in US dollars, and foreign exchange exposure is manageable. The market opportunity is as large as one’s ability to deliver. It is essential to work with local experts who understand the terrain. We are one of those experts.

We have a proven model that is ready to scale, capable of delivering 10,000 units to help meet Kenya’s annual housing deficit of 200,000 homes. The same opportunity exists in Uganda, Tanzania, and other countries in the region.