Equity Group, led by Kenyan banker James Mwangi, seizes Nairobi’s Eastland Hotel

Equity Bank Kenya, the flagship banking unit of leading lender Equity Group, led by Kenyan banker James Mwangi, has placed Nairobi’s Eastland Hotel under receivership reflecting a decisive step in recovering an undisclosed debt from the four-star property.

The action underscores rising strain in Kenya’s hospitality and real estate sectors, where lenders are tightening enforcement as non-performing loans climb.

Equity Bank steps up enforcement, appoints receivers

In a notice dated Sept. 11, Equity appointed insolvency specialists Kamal Anantroy Bhatt and Jai Kamal Bhatt of Anant Bhatt LLP as joint receivers and managers of Eastland Hotel Limited. “The receivers have full authority over the company’s assets and operations. Any dealings without their written consent will be considered unlawful,” the bank said. The hotel’s directors were ordered to submit a detailed Statement of Affairs within 12 days outlining its liabilities and assets.

The case follows a similar seizure last month, when National Bank of Kenya placed Nairobi Upperhill Hotel under receivership. Both instances signal that lenders are increasingly willing to enforce collateral rights rather than extend restructuring arrangements under the country’s Insolvency Act.

Hospitality sector faces deepening headwinds

Eastland, which opened in 2011 with a Chinese-inspired design, is located in Kilimani, about 7 kilometers from Nairobi’s central business district. It used to be a popular place for business and leisure travelers, but now it has to compete with Airbnb and other rental sites that offer lower rates and longer stays.

Kenya’s hospitality sector has benefited from rising tourist arrivals, but many hotels are still grappling with low occupancy and higher operating costs. Data from the Central Bank of Kenya shows real estate, trade, manufacturing and household loans account for more than 70 percent of total credit exposure and an even larger share of bad debt. Hotels and restaurants, though a smaller portion, face heightened risk of default.

Balancing recovery with strain

For Equity Group, the region’s largest lender with operations across Uganda, Tanzania, South Sudan, Rwanda and the Democratic Republic of Congo, the move illustrates a firmer approach to debt recovery. Mwangi, who is also the bank’s largest individual shareholder with a 3.39 percent stake, has overseen aggressive growth while tightening enforcement on non-performing loans.

The receivership will determine Eastland’s fate—whether it can be restructured, sold to new investors or liquidated. For now, the takeover underscores the pressure facing Kenya’s mid-tier hotels and the resolve of lenders to safeguard their balance sheets as defaults climb.