Centum Investment Company is a private equity firm with investments in agriculture, real estate, education, healthcare, energy, beverages and financial services. It was founded in 1967 as Industrial and Commercial Development Corporation Investments (ICDC). As of March 31, 2018, Centum’s total assets exceeded Sh66 billion. The company is associated with billionaire Chris Kirubi who is the company’s largest shareholder with a 30.5 per cent stake.
The company announced that it is selling its land and property valued at Sh12 billion to reduce its exposure to the real estate market which has risen to represent 65 per cent of its total assets in the year ended March. The company added that it will sell real estate assets worth Sh2 billion by March 2021. Centum had already raised Sh4 billion from the sale of some properties as of June. The biggest property disposals are planned over the next three years and will bring in Sh10 billion, including through bulk land sales. The company says the move is aimed at reducing its exposure to the real estate market.
Centum real estate assets include a 29.1 per cent stake in Two Rivers Mall, land and residential developments in Kiambu, Kilifi and Uganda. The real estate sector in Kenya is among the sectors that have been hit hard by the Covid-19 pandemic leading to the reduction in sales, rent yield as investors look for other investments to secure their wealth. The Nairobi Securities Exchange-listed firm has a target of spreading its investment across real estate estimated at 45-55 per cent of the portfolio, private equity estimated at 30-40 per cent and marketable securities estimated at 10-20 per cent.
Centum’s private equity holdings dropped to 17 per cent, way below the minimum target of 30 per cent following last year’s sale of Almasi Beverages, Nairobi Bottlers and King beverage for Sh19.5 billion. Centum held 53.9 per cent of the issued shares of Almasi Beverages and 27.6 per cent in Nairobi Bottlers. The company made the sale of all its shareholding in Almasi Beverages Limited (ABL) and Nairobi Bottlers Limited (NBL) to Coca-Cola Sabco East Africa Limited. Coca-Cola Sabco East Africa is a subsidiary of Coca-Cola Beverages Africa Limited, which is the largest bottler in Africa.
“We are currently overweight on the real estate asset class largely on account of a growth in value over time and as a result of the exits, we have realized in the private equity asset class. Our strategic objective is to rebalance the overall portfolio by releasing liquidity from the real estate portfolio for re-investment in the private equity asset class,” Centum’s chief executive James Mworia writes in the report. The sale of the beverage businesses has left Centum with Isuzu East Africa, Longhorn Publishers, NAS Servair and Sidian Bank.