By: IMMACULATE KARAMBU
The International Finance Corporation (IFC) plans to invest Sh1.5 billion ($15 million) in the initial public offer for Stanlib’s Real Estate Investment Trust (REIT).
Stanlib is seeking to raise Sh12.5 billion through the security, which will be invested in real estate to generate income for investors.
Stanlib’s Fahari I-REIT public offer was launched by the Nairobi Securities Exchange (NSE) last week. It is the first such security in Kenya.
IFC’s investment is bound to provide a boost for uptake of the offer. IFC is the private lending arm of the World Bank Group that mainly focuses on the private sector.
“Successful establishment of Real Estate Investment Trusts as a liquid financial instrument used to gain exposure to Kenyan real estate help unlock significant capital resources to fund Kenya’s real estate gaps. The total project cost is estimated at $125 million equivalent in Kenyan shillings and IFC will make an equity investment of up to $15 million equivalent in Kenyan shillings,” said IFC in a disclosure document released on Tuesday.
IFC’s investment is expected to validate REITs as a means for domestic players to access investment opportunities in the country’s booming real estate sector.