KENYA – Beer maker East African Breweries Limited (EABL) has signaled its intention to continue with the sale of prime assets, with the invitation of bids for a disused brewery and a prime piece of land in Mombasa.
The property, which sits on a six-acre piece of land in Mombasa’s Shimanzi Industrial Area, is on sale for a base price of Sh700 million.
“We have been instructed to seek offers in the region of Sh700 million, exclusive of value added tax,” property manager Knight Frank says in the sale documents.
This is the fifth year in a row that EABL is selling assets to help shore up its bottom-line.
The brewer is selling the Mombasa property as it moves to exit a leasehold agreement it has had with the Kenya Railways Corporation (KRC) for more than 60 years.
EABL, which is 50.02 per cent owned by UK’s Diageo, has recently sold several parcels of land, go-downs, its glass-making subsidiary as well as its Nairobi head office building in lucrative transactions that have helped spice up shareholder earnings.
The Mombasa facility, which was commissioned by colonial governor of Kenya Sir Evelyn Baring in February 1952, was one of two breweries (alongside the Kisumu plant) that EABL operated outside Nairobi.
The two factories were closed down to centralise production and distribution operations at the company’s Ruaraka headquarters in Nairobi.
Knight Frank described the Mombasa property as ideal for mixed-use development consisting of offices, retail outlets and logistics centre, manufacturing plant or roadside retail centre.
The property is located on Mombasa’s Makande Road – 1.5km from the Kilindini Port. Key facilities in the same locality include the National Cereals and Produce Board (NCPB) depot, Grain Bulk Handlers and other depots belonging to oil marketing companies.
Knight Frank says in the sale notice that the property is developed with an office block, a former brewing complex, bottling halls, workshops, warehouses and gate houses all measuring approximately 160,000 square feet.
“The property is currently vacant save for two base stations located within its precincts, one for Safaricom and the other for Airtel,” says the sale notice.
The property is currently held under a leasehold title from the KRC for a term of 72 years from January 1, 1977, meaning that there are 33 years left. EABL pays the railway firm Sh10 million in rent annually.
EABL management declined to comment on the transaction, insisting that the sale plan had entered a “closed period” pending release of half-year financial results later this week.