STANLIB Kenya Limited has listed the STANLIB Fahari I-REIT units on the Nairobi Securities Exchange (NSE), making history as it is the first listed property income fund in East Africa.
The occasion was marked by a bell ringing ceremony, a tradition that symbolises the commencement of trading on the bourse, at the NSE on 4 December 2015. The STANLIB Fahari I-REIT is listed on the Main Investment Market Segment in the ‘Real Estate Investment Trusts’ sector of the NSE.
The STANLIB Fahari I-REIT’s successful initial public offering (IPO) raised over 3.6 billion Kenyan Shillings, a material 1 billion Kenyan Shillings above the 2.6 billion Kenyan Shillings threshold required for listing. The I-REIT will invest in properties across the real estate sector including retail, commercial, industrial and housing. It has already invested in a modern shopping mall, offices and a warehouse. Investors will have access to a stable and regular income stream and benefit from a robust and diverse pipeline of income-generating properties planned by the REIT managers.
The listing gave initial investors in the STANLIB Fahari I-REIT an opportunity to realise the value of their investment, and those who are keen to own a stake in the real estate sector an opportunity to acquire units on the secondary market, through the NSE. Investors were able to buy and sell units of the STANLIB Fahari I-REIT on the NSE from 27 November 2015.
Commenting on the listing, Seelan Gobalsamy, STANLIB Group CEO says: “As we expand across Africa, we aim to focus on alternative assets and transactions that make a real difference in regions where we operate. Our strategy has always been to identify gaps and present opportunities that help grow economies and further improve the business environment and facilitate trade. The STANLIB Fahari I-REIT is positioned to do exactly that.”
An I-REIT is a collective investment vehicle that allows investors to pool capital, which is then invested in a portfolio of selected properties for a return. Investors gain through capital appreciation and regular distributions of the net income as prescribed by law. In the case of investors in the STANLIB Fahari I-REIT, distributions will be made twice a year.
The STANLIB Fahari I-REIT team led by the CEO, Mr Anton Borkum will continue to pursue suitable investment opportunities to enhance the overall portfolio mix and return.
The US has the world’s most advanced REIT market in the world. Australia, France, Japan, Canada, the Netherlands, Singapore and Hong Kong also have active markets for an asset class whose returns averaged 18 per cent in 2012. In Africa, growth in this market has been limited by the absence of enabling legislation. South Africa has traded in REITs for the last 10 years, while Ghana has had access to REITs since 1994 and Nigeria 2007. Kenya has now become the fourth exchange on the continent to host a REIT market.
“We believe the STANLIB Fahari I-REIT will play a role in expanding Kenya’s capital markets and give investors the ability to own a slice of Kenya’s vibrant property market. In turn, this will have a positive effect on the country’s economic development. The REIT will constructively contribute to regulating real estate pricing, unlock capital and lower interest rates on borrowing,” says Gobalsamy.
STANLIB Kenya is the third largest asset manager in Kenya. STANLIB has assets worth over US$2.3 billion under management in East Africa for a wide array of clients including pensions, endowments, parastatals, corporates, governments, NGOs, churches, savings and credit co-operatives and charitable organisations.
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