The Private Infrastructure Development Group (PIDG) has committed a substantial Sh1.95 billion ($15 million) to the Africa Logistics Properties (ALP) industrial real estate investment trust (iREIT), marking a decisive step in the evolution of Kenya’s logistics and warehousing infrastructure. This investment is seen as a cornerstone for the country’s ambition to become the region’s premier logistics hub.
Shifting the Landscape of Industrial Warehousing
The capital infusion, facilitated through PIDG’s InfraCo Africa division, represents more than just a financial boost—it highlights Kenya’s transition from traditional low-spec warehousing to state-of-the-art, grade-A storage solutions. This shift is seen as critical for enhancing the efficiency of supply chains across East Africa.
Previously, Kenya’s industrial sector relied heavily on informal and inefficient storage units. The introduction of the ALP iREIT, which was approved by the Capital Markets Authority (CMA) in December 2025, marks a new era. The funding will directly target key industrial properties, including:
- ALP North (Tatu City): A 35,000-square-meter complex already home to multinational corporations.
- ALP West (Tilisi): A 20,000-square-meter site aimed at alleviating congestion in Nairobi’s industrial zones.
- Green Infrastructure: The implementation of EDGE-certified sustainability measures to ensure environmentally friendly operations.
According to ALP CEO Raghav Gandhi, this investment represents more than just infrastructure development—it is about accelerating trade across the region. “With PIDG as an anchor investor, we are opening the door for Kenyan pension funds and institutional investors to engage in this new, stable, dollar-denominated asset class,” Gandhi noted during the signing ceremony.
Strategic Timing Amid Growing Competition
The timing of this investment could not be more critical. With the African Continental Free Trade Area (AfCFTA) gaining momentum, Nairobi is engaged in fierce competition with cities like Dar es Salaam and Addis Ababa for regional logistics dominance. The Sh1.95 billion investment will help ALP transition from a “build-and-sell” model to a long-term income-generating strategy, allowing for sustained infrastructure growth and maintenance.
Claire Jarratt, PIDG’s Head of Investment Management, emphasized the broader implications of this investment: “This shows that industrial real estate in Africa is a viable, investment-grade asset, paving the way for local funds to reinvest in Kenyan infrastructure, rather than seeking opportunities abroad.”
While automated warehouses are often criticized for their lower job density compared to manufacturing operations, they promise to reduce logistical costs across Kenya. For example, faster product movement at Tatu City could help stabilize prices on everyday goods like cooking oil and maize flour in suburban areas like Ruiru, benefiting consumers directly.
However, the real test will be the occupancy rates of these high-end facilities. Many small and medium-sized enterprises (SMEs) still rely on more affordable, but less efficient, storage solutions. For now, though, the major players have placed their bets—Kenya is not just building roads; it is creating the logistical infrastructure to drive its economy forward.
