Mukesh Ambani sells Kenya building for Rs115cr

MUMBAI: A few weeks ago, a plush 21-storey building in the commercial district of Nairobi was sold to the World Bank for nearly $23 million (approx Rs 115 crore), making it the largest single property deal in East Africa. The seller: Mukesh Ambani. The billionaire Indian businessman has a little-known realty venture in Kenya in partnership with builder Jaydev Mody's Delta Corp and their firm has emerged as a major player in the region. The elder Ambani has been steadily upping his interest in East Africa, a continent that forms a key component of his firm Reliance Industries' internationalization strategy. It was in 2007 that the energy-to-education conglomerate made its big move by acquiring a majority stake and management control of Gapco, a petroleum downstream company with a presence in several countries including Tanzania, Kenya and Uganda. Interestingly, though Ambani has little play in property development in India, the chairman of RIL has made significant investments in Kenya's real estate market. RIL Group holds a 60% stake in the joint venture with Delta Corp and the partnership firm has so far invested $40 million in the region. The JV firm, established in 2008, has one million square feet of land which is at various stages of development.
Several Indian corporates, including Tata, Essar and Bharti, have made large investments in Africa across sectors from steel to telecommunications. Mukesh and Mody - both are wildlife lovers and Kenya happens to be one of their favourite holiday spots - are also setting up a hotel in Nairobi. It couldn't be ascertained whether the property would be sold to a third party or they would manage it. Ambani has interests in the hospitality sector after he made a surprise entry into Oberoi Hotels, the third largest room-operator in India. Mody runs a few resorts in the country including the Ramada Caravela Beach Resort in Goa. His company, Delta Corp, is the largest casino operator in the country. In the recent past, RIL reportedly looked at acquiring UK oil giant BP's fuel marketing assets in East Africa but nothing materalized. India's largest private sector energy company through Gapco sold 1.6 million kilo litres of petroleum products in 2010, which was nearly 24% higher than what it sold in 2009. It clocked a turnover of $1.1 billion in 2010 while its operating profit was nearly $30 million.