The Capital Markets Authority (CMA) has announced the approval of a listing by introduction of the Local Authorities Pension Trust (Laptrust) Imara Income Real Estate Investment Trust (I-REIT) on the Nairobi Securities Exchange’s (NSE) Main Investment Market; Restricted Sub-Segment.
Laptrust will hold 100 percent of the Imara I-REIT securities, thus will not offer them to the public initially.
In May 2022, CMA announced its intention to relax rules for firms intending to list at the NSE.
This follows a tendency by firms to avoid the bourse in the last few years, with the latest listing being in December 2020 when HomeBoyz Entertainment went public by introduction (without selling shares). Also, the last initial public offering (IPO) was in 2015 when property investment fund ILAM Fahari I-Reit raised Ksh3.6 billion.
The Laptrust Imara I-REIT will be listed as a close-ended fund at Ksh20 per unit based on the net asset value of the scheme as of the time of listing, with a total of 346,231,413 units. The valuation of the I-REIT, at the listing, will thus be Ksh6,924,628,260. The units may only be transferred to persons who qualify as Professional Investors and at a minimum trade size of Ksh5 million.
“This REIT underscores some of the key objectives of the REITs policy and regulatory framework which included enabling pension funds to access liquidity, without complete disposal of the real assets that they hold, and diversification of property holdings across geographical locations and types (commercial, residential, purpose-built developments — in this case a school, among others),” CMA Chief Executive Officer Wyckliffe Shamiah noted.
“This listing by introduction gives Laptrust the platform to build investor confidence in its brand through transparency and disclosure, a track record of performance and compliance with regulatory requirements. Additionally, the listing of the Imara I-REIT confirms that REITS have a critical role in meeting the Government Agenda on housing and democratization of investment opportunities,” added Shamiah.
The properties that will be held under Imara I-REIT include: CPF Metro Park, CPF House, Pension Towers, Freedom Heights Mall and Service Plot, Man Apartment and Nova Eldoret.
The trustee is Co-operative Bank of Kenya Ltd and the REIT will be managed by Sterling REIT Asset Management Limited. The transaction adviser was Standard Investment Bank.
Commenting on the development, Cytonn Investments CEO Edwin H. Dande called on the CMA to collaborate with market players to list more REIT firms.
“It’s been 10 years since the REIT regulations, and this is only the second listed i-REIT. We need to review the regulations so that we can bring more real estate products into the market. The REIT market is key to funding the President’s Housing Agenda,” Dande noted.
Dande also urged CMA to remove the high minimum of Ksh5 million for DREITS, which he says locks a lot of people out of the market.
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