Fusion Capital gets regulator approval to issue Sh7.4 bn REIT

Fusion Capital chief executive Luke Kinoti. The private equity firm plans to raise a maximum of Sh7.4 billion shillings to be split between commercial and residential development. FILE PHOTO |  NATION MEDIA GROUP

By GEORGE NGIGI, gngigi@ke.nationmedia.com

In Summary

• The firm plans to raise a maximum of Sh7.4 billion shillings to be split between commercial and residential development.
• The offer is restricted to professional investors who will put in a minimum of Sh5 million.

The Capital Markets Authority (CMA) has given Fusion Capital the green light to issue two Development Real Estate Investment Trusts (D-REIT), the first such securities to be launched in Kenya.

Fusion Capital plans to raise a maximum of Sh7.4 billion to be split between commercial and residential development.

“The approval of the first Development REIT schemes is in line with our mandate to facilitate uptake of the innovative product to support the growth ambitions of the vibrant real estate sector” said CMA’s acting chief executive Mr Paul Muthaura.

The commercial D-REIT will retail at Sh17 a unit with a target of raising a minimum of Sh1.15 billion and a maximum Sh2.3 billion.

The residential D-REIT has separately been approved to issue and list new units of a minimum of Sh2.58 billion and a maximum Sh5.16 billion. A unit of the residential D-REIT has a nominal value of Sh23.

The offer is restricted to professional investors who will put in a minimum of Sh5 million.

Last year Stanlib issued an investment Real Estate Investment Trust (I-REIT) which has been trading at the Nairobi Securities Exchange since November.

An investment Reit allows transfer of ownership of existing property to the public while a development Reit is used for construction of a property.

READ: Stanlib opens way for property developers to issue more Reits