The State of Cytonn: Putting The Numbers Into Perspective

What comes to your mind when the name ‘Cytonn’ is mentioned? Real estate, right? Or is it a home? What about the property?

I first came across the term when I was searching for a home to buy. A friend of mine recommended them to me.

If I was the one being asked the questions about Cytonn, I would have summarized them in a very short sentence, “It is a mark of quality,” and I will try to explain why. I became a homeowner, thanks to Cytonn Amara Ridge and this has given me the curiosity to dig into their history, just to see whether other homeowners share the same sentiments.

From what I found out, Cytonn Investments was formed by a team that had massive knowledge in real estate, property, and asset management given the fact that the whole top brass worked together in one of the top asset managers in the region.

What these former top executives wanted was a company that appreciated and focused solely on the customer. They say that a customer is a king and queen, right? No business has ever succeeded by overlooking there real reason of existence; the customer and that is what Cytonn is all about.

From my ‘diggings” or as Muhamed Ali used to say before he became a politician, “upekuzi”, Cytonn primarily focuses on offering alternative investment solutions to global institutional investors, individual high net-worth investors, local institutional investors, and diaspora investors interested in the East-African region. This, however, does not mean that individual investors and homeowners are not central.

Someone said that no one can stop an idea whose time has come. A good idea will always thrive no matter the circumstance. Good ideas often fail when those behind the wheel have no vision but the Cytonn idea was both brilliant and fell in the hands of those who knew where to tailor the ship.

Before I move into the numbers, being among the few journalists who fell in love with numbers, it will be an injustice if I failed to mention the product line of those who made a homeowner.

The Numbers

We all agree that numbers don’t lie. In overall, Cytonn has projects under its mandate worth 82 billion shillings.

The company employs an innovative approach that brings together capital through Cytonn Investments, land through joint ventures with landowners, and development expertise through Cytonn Real Estate, onto one platform where each party is aligned and focused on aspirational real estate developments.

Through their real estate projects, the company has managed to offer job opportunities to over 5000 people, the majority coming from the local communities where the projects are located. The firm has also employed over 270 employees who help in executing their mission with a distribution network of over 300 people.

In a country where the unemployment rate stands at 39.1 percent, getting a firm that ‘feeds’ more than 5,000 is not something we can just brush aside. Right?

One of the main reason for the increased unemployment according to potential employers is that most graduates fail to meet the standards of the job market. “Most job seekers are ‘theoretical’ and not ‘practical’” lamented one employer. Realizing this gap, Cytonn started providing mentorship to more than 500 fresh graduates over a 4 year period, through the Cytonn Young Leaders Program (CYLP), absorbing 40 percent of them.

Gender balance is always a subject of discussion in the country. A while back, female members of parliament went to the chambers with white scarfs to protest over what they termed as a failure by parliament to pass the 2/3 gender rule. Cytonn long achieved this, with its staff comprising 51 percent and 49 percent male & female employees respectively.

The group recorded a strong balance sheet growth with Total Assets increasing by 49.4 percent to 17.7 billion shillings as at 31st December 2017 from 11.8 billion shillings recorded in the previous year which was mainly driven by the growth in the real estate asset class.

This was achieved amidst the tough economic environment for businesses in Kenya that was experienced in 2017 which was brought about by low credit growth to the private sector, which hit a low of 2.4 percent in 2017, and the prolonged electioneering period.

At the beginning of 2017, Cytonn was able to purchase a 12.5 percent stake in Superior Homes Limited, a real estate developer, concentrating on the development of affordable mid to high-end residential communities.

In March 2018, Cytonn was granted a fund manager’s license by the Capital Markets Authority (CMA). The licensing of Cytonn Asset Managers Limited came in as the first step towards bringing certain activities of the company within CMA’s regulatory ambit.

Cytonn’s current portfolio comprises of 10 investment ready real estate projects; 1 completed, while 4 are in various stages of development and 5 are still at the concept stage.

These projects include:

Amara Ridge:

Is a Ksh. 1 Billion luxurious gated community at the heart of Karen in Nairobi, Kenya, comprising of 10 villas o­ffering comprehensive lifestyle amenities with a state of the art clubhouse. The project broke ground on the 28th of September 2015 and was completed in Q1 2018.

Amara Ridge is 100 percent complete and 100 percent sold with a projected return of 30 percent.

The Alma:

Is a comprehensive lifestyle development comprising of 477 apartment units, a retail center, and a nursery school. The apartments are clustered in 9 apartment blocks, with the parking provided on ground floor level and the green areas elevated on the first-floor level. The project was estimated at 4.7 billion shillings and the amount spent as of now is approximately 2 billion shillings. It is approximately 67 percent complete and 51 percent sold, with a 28 percent project return.

The Ridge:

Is a comprehensive and luxurious mixed-use development located in Ridgeways, Nairobi approximately 10 kilometers from the CBD, 300m from the junction of Kiambu Rd and the Northern Bypass, 5 minutes’ drive from the Two Rivers Mall, the largest shopping mall in East Africa, less than 10 minutes to Windsor Golf Club and 15 minutes from UNEP headquarters in Gigiri.

The Ridge, which sits on 9.9 acres of land and touches the Northern Bypass, was inspired by the need for a live-work-play environment that aims at bringing together people from di­fferent walks of life to share a luxurious and convenient lifestyle.

The development comprises of residential and commercial spaces. The residential development consists of 1, 2 and 3-bedroom apartments. There is also an option of 3 bedrooms with a domestic servant quarter premium and penthouses that occupy the topmost floor.

The project was estimated at 12.1 billion shillings and so far around 800 million shillings has already been spent on it. With a 22 percent project return, the Ridge is 8 percent complete and 38 percent sold for Phase 1.

Taraji Heights:

Is a mixed-use development which off­ers elegant family homes in a prime location in Ruaka, along Limuru road. The 2.5-billion-shilling project sits on a 2.8-acre piece of land comprises of 267 units – 2, 3 and 3 bedrooms with DSQ apartments. Construction is estimated to be 37 percent complete, 13.7 percent sold with a 28 percent project return. It is projected to be complete by mid-2019.

RiverRun Estates:

Is a master planned mixed use development comprising of over 500 residential Villas and townhouses, over 500 apartment units to be complemented by social amenities i.e. a commercial center, a school, several playgrounds, Water Theme Park, Riverfront Promenade, cottages, and a salient feature; an ultra-modern hotel with a frontage to the dam.

The 15-billion-shilling development sits on 100 acres of land in Ruiru within proximity of Tatu City. It was launched in June 2017 and the company broke ground in April 2018. Around 400 million shillings has already been used on the project, which is 1 percent complete, 46 percent sold for Phase 1 with a 12 percent project return.

Newtown:

Newtown is an exceptional master planned development within the greater Nairobi Metropolis that once complete will comprise of residential, commercial, educational, logistics, recreational and hospitality precincts.

The 22.5-billion-shilling project sits on approximately 1000 acres located in Athi River, Machakos County. The development aims to provide a world-class city that will create a Live, Work & Play environment while creating traction for the area.

It is 5 percent already sold and around 40 million shillings have already been used on the development whose groundbreaking for the school will take place in Q4 2018.

Situ Village:

Is a private, exclusive gated community with 50-4 bedroom villas, each with a plinth area of 380 sqm, and 10-3 bedroom cottages with 221sqm plinth area.

The villas feature two designs; The Mediterranean and The Andalusian. It is located in Ololua, Karen.

The 5.5-billion-shilling project broke ground on 31st of July 2016 but construction yet to begin given the litigation that the company got into with the resident going to NEMA.

Work is expected to resume in Q4 2018 and it is 26 percent sold.