Fusion Capital offers rent relief for tenants in Nairobi office building
Fusion Capital, a private equity firm focused on real estate investment in East Africa, has announced plans to offer rent relief to tenants in its Upper Hill property, Flamingo Tower. The decision was made due to the Covid-19 outbreak.
Flamingo Tower is a prime office building in the heart of Upper Hill Nairobi, consisting of 18 floors.
The board of Flamingo Tower Limited has agreed to lower the property’s monthly rental consideration by 30% for the quarter beginning 1st April to 30th June 2020 for all privately owned businesses in the premises. The Flamingo Tower board will also enforce the directive issued by President Uhuru Kenyatta to reduce VAT to 14% until further notice.
Samuel Mwangi Kimotho, an executive director at Flamingo Tower commented, “We are cognisant of the severity of the pandemic and the strain it has put on businesses across the country and the world at large. We very much see our leases with our tenants as mutually beneficial partnerships. We, as the board of Flamingo Tower Limited, hope that the discount on the rent will offer some relief to our partners during these uncertain times.”
Fusion Capital’s chief executive officer, Daniel Kamau commented, “SMEs are really the engines of the East African economies. A lot of the retail and office occupiers are SMEs in nature and as such landlords should play a role in getting them back to trading after the crisis. Property owners can support SMEs through rent concessions, it’s in the landlord’s interest that these businesses continue surviving and so sharing of rent risk will be important."
Kamau further stated that the property owners will need to appreciate that the stability of the businesses post-crisis will be more critical to them. "The tenants will also need to appreciate that the landlords have standing costs – including paying their employees, securing the premises, paying for water, security companies, electricity, maintenance of the building – and hence a 100% waiver over the lockdown period will not necessarily be the way out."
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