Actis will launch the construction of the second phase of the Nairobi Business Park on Tuesday this week that will be a significant step in increasing its real estate portfolio in the region.

The London-based private equity firm announced last week that it has secured Ksh23.6 billion ($278 million) for real estate projects across the continent.

The second phase of the Nairobi Business Park will cost Ksh1.85 billion ($21.8 million) and is set for completion in the first quarter of 2013.

The park is expected to cater for both office space and business premises such as restaurants. Phase one of the business park was completed in 2004.

READ: Actis boosts real estate presence in East Africa as middle class rises

At the same time Actis announced it has secured a Ksh2.4 billion ($28.2 million) of the Ksh12.6 billion ($148.2 million) it needs to develop East Africa’s largest mall, Garden City.

The amount, part of the Ksh23.6 billion ($278 million) that the fund raised to invest in real estate in Africa, will fund the construction of the 50,000 metre-square mall to be situated about 10 kilometres from Nairobi city centre.

The project is expected to start in December and is scheduled for completion by May 2014.

“Actis has confirmed the final close of its second African real estate fund, Actis Africa Real Estate 2, with total commitments of $278 million.

The fund will focus on retail and office developments in East, West and Southern Africa, excluding South Africa,” said the fund last week.

Currently, the biggest malls in the region are the Sarit Centre and the Westgate, each measures 30,000 square metres. The Junction Mall — developed by Actis — measures 26,000 square metres. All the three are in Nairobi.

The project has received positive response from the market, with a South African retailer indicating it will open its first store in Kenya at the mall.

Nakumatt and Uchumi are also said to be eyeing the development that will also include 500 apartments. Foschini, the South African fashion group, is also said to be interested in getting space at the mall.

Kenya has off late experienced a huge surge in development of middle and high end properties with Nairobi and Mombasa ranked one of the most expensive real estate cities in the world.

The shopping mall concept has also picked up in the country with the retailers keen to target the regions rising middle class who shop in these malls.

The opportunities in real estate both for commercial and housing have attracted private equity investors as well as mortgage companies to either construct the buildings or back companies involved in real estate.

By Peterson Thiong’o and Emmanuel Were