23/06/2023
The Special Economic Zones Game
So this week, Two Rivers Development has joined the list special economic zones(SEZ) in Kenya. One of a kind strategy for private developers.
TRD which seats on 102 acre master planned and serviced land is a mixed use development comprising of Two Rivers Mall( the anchor project), commercial and residential projects.
However, only 64 acres of the whole 102 acres will be under the Two River International Financial Centre. This excludes the mall.
The 64 acre SEZ include 150,000 sq ft of grade A office, Holiday Inn hotel and residential projects by Centum Investment( Mzizi, Riverbanks, Cascada and Loft).
The developer is looking to up their game with an extra 1.2 million square metre of space which will include a conventional centre and five star hotel.
So what's the catch in all these ?
Majorly there are 4 benefits of doing business under SEZ. Infrastructure from the government, incentives, market access and favourable regulatory regimes.
That is to say, you're exempted from certain taxes. It could be customs duty, exercise duty or import declaration fee or even a combination of all. You access markets negotiated by the Kenyan government and other trade partners & a times you get special tarrifs on factors such as energy and logistics.
One of a governments major role is to create a condusive business environment so as to attract the big corporates/ investors. SEZ is one of those efforts.
The future must not be dull for developers in Nairobi. Reecently there was a Kenya - EU trade partnership agreement and yet to be concluded is Kenya- USA strategic trade and investment partnership.
Not to forget that on March this year UNOPS announced it's African regional office will be relocating from Denmark to Nairobi by end of this year. Later on May the Kenyan President announced the expansion of UN offices to have the capacity of 9,000 conference delegates at any meeting.
To attract all these businesses coming into the country, TRMD has to find more competitive advantages beyond it's ideal blue zone location. What better direction to look than getting it's clients cheaper ways of doing business. Cheaper than those operating in Kenya. Note that SEZ are regarded as territories outside Kenya( in business terms).
Conclusively, when a BPO or a tech giant is looking to opening offices in Nairobi, it'll be more favourable to set up in Two Rivers International Financial Centre compared to another Grade A office in Westlands.
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