Money Markets
St Paul’s Property Trust director Richard Britten-Long. PHOTO | SALATON NJAU
By JOHN GACHIRI
In Summary
- St Paul’s Property Trust is planning to list on the NSE’s Growth Enterprise Market Segment (GEMS) by the end of the year.
- Funds raised from the Kenyan market will be used to buy up to four rental properties outside London and whose tenant is the UK government or town councils.
UK-based St Paul’s Property Trust is seeking to raise
Sh5 billion from the local market ahead of its listing on the Nairobi
Securities Exchange (NSE).
The company is planning to list on the NSE’s Growth Enterprise Market Segment (GEMS) by the end of the year.
“We are planning to raise Sh4 billion through
listing on the NSE but have a green shoe option of Sh1 billion,” said
Richard Britten-Long, a director at St Paul’s.
This means the firm will take up to Sh5 billion if there is an oversubscription.
The company said it could not give finer details
such as the listing price or how many shares will be listed pending
regulatory approval.
The firm’s strategy is to buy high-grade offices
that can house government departments, which normally tend to sign long
term leases and do not default on payments, ensuring stable and reliable
rental income.
Funds raised from the Kenyan market will be used to
buy up to four rental properties outside London and whose tenant is the
UK government or town councils.
St Paul’s Trust will then borrow using the
additional properties as collateral and use the debt to buy properties
that have the ability to be shaped up and then sold or rented at a
premium.
The NSE listing is meant to tap into the local
capital market where there is demand from fund and pension managers who
want to diversify their portfolios in light of the bourse’s bear run,
which has touched a three-year low.
“The company has chosen Kenya for its primary
listing due to the demand for, and relatively low supply of, high
quality and risk-averse listed commercial property vehicles. Several
successful listed property vehicles are already listed on the
Johannesburg Stock Exchange,” said St Paul’s Trust in a statement.
Analysts say that they expect the bourse to remain
suppressed due to the numerous profit warnings that have been issued in
recent months.
“We remain neutral with a negative bias on equities
given the significantly lower earnings growth prospects for this year.
The market is now purely a stock pickers’ market, with few pockets of
value,” said a market report by Cytonn Investments.
Pension and fund managers are also showing interest
in returns that are denominated in another currency in light of the
weakening shilling, which has touched Sh105 to the dollar, a 14 per cent
depreciation since the beginning of the year.
Kenswick will manage St Paul’s property portfolio
while Burbidge Capital are the nominated advisors. Coulson Harney will
handle the legal work, Deloitte are the reporting accountants and
Levanter Africa are in charge of communications.
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