Fusion Capital extends sale of Sh2.3b D-REIT

Private equity firm Fusion Capital has extended the sale of its Sh2.3 billion development real estate investment trust (D-REIT) by two weeks after slow investor uptake.

The D-REIT sale, which was to end on the 15^th of July will now close on the 26^th of July to give investors an opportunity to buy.

The development REIT is locked to wealthy investors with a minimum buy in of Sh5 million.

Fusion Capital Chief executive Officer Luke Kinoti said investors were still pooling resources together to buy the 100 million units that are on offer.

“As the pioneers of the D-REIT model on the continent, investors have requested for some additional time to pool resources and prepare their applications accordingly. As a matter of fact, we have had several meetings to enable fund managers to dissect and fully comprehend this unique investment instrument,” Mr Kinoti said.

A development REIT is a listed collective investment instrument allowing investors to pool capital to develop large-scale real-estate properties.

Real estate investment trusts are still a relatively new investment product in the country with investors taking time to understand the model.

Stanlib Investment which raised Sh3.6 billion from its investment real estate investment trust (I-REIT) in 2015 was also forced to extend the offer period.

Fusion Capital plans to use the funds raised from the D-REIT to develop a mixed commercial property in Meru dubbed Greenwood City. Once complete Greenwood City will have a 25,000 square meter shopping mall, a grade A office block occupying 20,000 square meters, 50 two- and three-bedroom apartments and a public car park with 240 slots.

The listing date for the Sh2.3 billion Fusion Capital D-REIT offer will be on August 15, 2016.

Report by Karen Mwaniki