Home Afrika shareholders back projects

 

NSE chairman Eddy Njoroge (from left), Vision 2030 Secretariat director-general Mugo Kibati and Home Afrika chairman Lee Karuri during the bell ringing ceremony, marking the company’s debut at the NSE on July15, 2013. Photo/Salaton Njau 

By John Gachiri

Home Afrika will create multi-billion- shilling investment vehicles to drive its ambitious expansion programme after getting shareholder approval.

Shareholders gave the firm’s board the go-ahead to set up two Real Estate Investment Trusts (REITs) and a Sh10 billion property at the firm’s fifth annual general meeting held in Migaa, Kiambu County last Saturday.

The firm said that investment banks, legal firms and other transaction advisers have begun working on a development REITs which is to be listed on the Nairobi Securities Exchange (NSE).

“One will be a development REIT, comprising various Home Afrika projects, to be listed on the NSE which will be undertaken immediately and the other will be an investment REIT probably in the next five years,” said Home Afrika chief executive Gerald Chege in a statement.

Development REITs will allow Home Afrika to raise capital by selling shares in a project to investors who in turn will make a return after completion and the resale of the project while investment REITs give buyers a return from income generated from the existing projects.

The firm that recently listed on the NSE’s Growth Enterprise Market Segment plans to have a massive $1 billion (Sh87 billion) property portfolio by 2017 and to achieve this it has said corporate bonds, an initial public offer and other forms of raising capital are all on the table.

Listing a REIT by Home Afrika will make the firm a pioneer in using the capital markets to raise money for the property sector.