Lake Basin mall seeks Sh4bn State bailout to avoid auction – Business Daily
Lake Basin Mall in Kisumu. FILE PHOTO | NMG
The Lake Basin Development Authority (LBDA), which owns one of the largest shopping malls in the western Kenya, is seeking a Sh4 billion State bailout to save the property from the auctioneer’s hammer.
The firm says delays to repay the Sh2.5 billion loan borrowed from Kenya Commercial Bank has accumulated an estimated Sh1.5 billion in interest since 2016.
LBDA managing director, Dr Raymond Omollo, pointed out that the low occupancy level has made it difficult for the organisation to cater for its overhead costs.
“For over six years now, we have been stuck at 40 percent occupancy while another 20 percent is currently booked,” he said
The regional boss indicated that they are currently collecting Sh50 million per month against a potential of between Sh150 to Sh200 million per month from the 27,000 square metre net area shopping complex.
“We are hoping to engage President William Ruto’s administration to help us with the funding to support our recurrent budget and for LBDA to realise the full capacity of the multi-billion shilling investment,” he said.
The authority says the project has been greatly affected by the failure to get an anchor tenant to drive traffic and increase its footfall to attract more tenants.
Since completion of the five-storey mall in 2016, the 60,000 square feet anchor tenant space has not been occupied following unsuccessful attempts to sign a contract with a major retail chain.
However, the move by the Kenya Revenue Authority (KRA) to relocate its western Kenya offices from Swan Centre to the mall in 2019 rekindled its prospect.
Other major clients include the Communication Authority of Kenya which has occupied the second floor of the building and the American hotel chain, Best Western, which has taken up the six-floor facility with a total of a 43-room three-star hotel.
The mall has about 350 car parking slots, a modern food court, frameless glass shop fronts, four escalators, a children’s playground and a recreational park.
Dr Omollo further pointed out that the delay to complete the construction of the eight-kilometre dual carriageway Kisumu Boys roundabout – Mamboleo junction has affected the occupancy of the facility.
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