StanChart auctions luxury Mombasa apartments

Standard Chartered Bank Kenya #ticker:SCBK has put nine prime residential hotel apartments in Pangoni Beach Resort in Shanzu, Mombasa, under the auctioneers hammer over unpaid loans.

The apartments are being sold for a reserve price of about Sh84.6 million combined. The units are adjacent to Mombasa Continental Resort, Serena Beach Hotel and African Safari Club.

They are on a four-acre property registered under Oak Apartments. The land is developed with 50 one, two and three bedroom ensuite apartments plus a Jacuzzi overlooking the sea, according a notice advertising the auction. The apartments are located on Shanzu beach, about 30 minutes’ drive from Moi International Airport and 20 minutes from the city centre.

They were funded by several lenders including StanChart and East Africa Development Bank (EADB) which put in Sh261 million in 2008 according to the regional lender’s website.

EADB did not respond to our request for comments while StanChart said the matter is confidential.

There has been an increase in property auctions as the real estate market enters into a slump following years of growth and high returns.

Banks battling to cap their dud loans have opted to take tough measures of enforcement in order to get back part of their money in struggling investments.

Central Bank of Kenya Governor Patrick Njoroge said banks have especially targeted recoveries in real estate, a move that has helped reduce their stock of non-performing loans (NPLs).

“In particular, there were decreases in NPLs in the real estate, transport and communication, and building and construction sectors reflecting increasing repayments and the enhanced recovery efforts by banks,” Dr Njoroge said last month.