CMA gives Fusion Capital green light to list REITs

Fund manager Fusion Capital has received the Capital Markets Authority approval to raise up to Sh7.4 billion through a real estate investment trust (REIT).

Fusion Capital will be floating two seeking a development REITS (D-REIT), implying it will be constructing property. The REITs will however be limited to professional investors, with a minimum investment of Sh5 million.

The first REIT will seek to raise up to Sh2.3 billion to put up commercial property while the second REIT seeks to raise up to Sh5.1 billion for residential units.

Real estate investment trusts were introduced in 2013, to help investors raise funds to finance real estate projects. A REIT is a collective investment scheme structured as a trust where an investor owns rights or interests in property in the form of units and earns returns from income or capital gains.

“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 ag CEO Paul Muthaura said.

Last year, Stanlib investment was the first to market with a REIT, raising Sh3.6 billion through an income REIT that is currently listed on the Nairobi Securities Exchange.

There was however investor apprehension towards real estate investment trusts, with Stanlib having to extend the offer period and educate investors on REITS.

Fusion Capital will list the two REITS to trade on the NSE.

Centum, UAP and the National Social Security Fund are among the other companies that have expressed interest to raise funds through REITS.