Stanlib’s real estate trust to turn you into a landlord

By: LILIAN OCHIENG

The returns on investments on Kenya’s real estate industry are good and worth seeking, industry experts have noted, demystifying the fear surrounding the uptake of the maiden Real Estate Investment Trust.

Mr James Muratha, Stanlib East Africa director is calling on investors to invest their money in Kenya’s first real estate investment trust — Stanlib Fahari Income-REIT.

Mr Muratha told Money that consumers interested in the form of investment still have until November 18 to access entry and get returns twice every year.

“To apply, visit a stoke broker or any Co-operative Bank branch. You can also visit CFC Stanbic Bank,” said Mr Muratha during an interview in his office last week, “This investment is secure because it is an income-generating one, there is no risk involved in building properties; we acquire ready properties whose risks have been assessed.”

NO TAX

Mr Muratha said that as an investor, one assumes the role of a landlord who expects returns twice every year.

There is no tax payable on the returns made from this product.

However, the investing public has shied away since the launch of the Fahari I-REIT because of the uncertainties around its clarity as an investment vehicle.

Applications for the product were to end on November 12 but this has been extended to November 18 due to muted uptake from the investors.

The Stanlib Fahari I-REIT public offer, is issued at a minimum subscription of Sh20,000 (1,000 units) and a nominal value of Sh20 each.

It will be listed on the Nairobi Securities Exchange (NSE) on November 26 after the closure of applications.

The NSE chief executive Geoffrey Odundo said the launch would enable Kenyans invest affordably in the lucrative real estate market.

GROWTH

The US has the world’s most advanced REIT market.

In Africa, growth in this market has been limited by the absence of enabling legislation.

South Africa has, however, been trading in REITs for 10 years now, while Ghana has had access to REITs since 1994 and Nigeria 2007.

South Africa is considered among the most elaborate REITs markets in the continent with about 30 companies operating listed REITs on the Jo’burg Stock Exchange.

Market research shows that the South African REITS market has constantly experienced positive growth save for the period during the 2008 global economic crisis.

Mr Muratha says that the I-REIT market is a safe investment choice because properties bought must have at least 80 per cent occupancy rate.

Further, he said the investment product is run by trustees licensed by the Capital Markets Authority, the Co-operative Bank and Housing Finance, clearing any doubts of possible fraud in the market.

Fahari-I-REI has so far accumulated Sh2.5 billion worth of properties and looks at raising Sh10 billion before it lists at the bourse.

The listing will allow consumers sell their shares at the stock exchange if need be.

SOURCE: DAILY NATION