Capital Markets Authority (CMA) has today granted approval to the first Income Real Estate Investment Trust Scheme (REIT) in Kenya, Fahari I-REIT, which is to be issued by Stanlib Kenya Limited.
The approval is issued pursuant to Regulation 18 of the Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2013.
Stanlib Fahari I-Reit will issue an initial public offer for investors to subscribe to units in the new REIT which is expected to raise a minimum of Kshs2.6 billion and a maximum of Kshs12.5 billion.
The unrestricted IPO will be listed on the main investment market segment of the Nairobi Securities Exchange (NSE).
A real estate investment trust is established for the purpose of collective investment in real estate with the objective of earning profits or income from real estate as beneficiaries of a trust.
Investors contribute money or buy units in a REIT in similar manner to shares in a company, in exchange for rights or portion of the income generated by a portfolio of real estate.
Persons investing in a REIT, like shares, do not have the day-to-day control over the management of assets of the REIT as assets are managed by a professional and licensed REIT Manager.
In a statement released to newsrooms, Capital Markets Authority acting Chief Executive,Paul Muthaura noted, ‘The approval of Stanlib Fahari I-Reit marks a fundamental step towards efforts to deepen and develop the capital markets by facilitating diversification of products available in the market.’
The Stanlib Fahari I-REIT will give local investors an opportunity to participate in the blossoming real estate sector in Kenya at an affordable price.
The REIT scheme will also provide unitholders with stable cash distribution in the form of distributions from investments in a diversified portfolio of income generating real estate properties.