Markets & Finance

Fusion Capital extends D-Reit sale to July 26

kinoti

Fusion Capital chief executive Luke Kinoti. PHOTO | FILE

Fusion Capital has extended the sale of its Sh2.3 billion development real estate investment trust (D-Reit) that was to close last Friday to July 26, indicating that take-up of the new type of investment may have been below expectation.

The sale opened on June 23 and was to run until July 15, with the developer aiming to raise funds to finance the development of Greenwood City, a mixed use real estate project in Meru County. The listing date has also been pushed from July 28 to August 10.

The D-Reit is targeting high networth investors and fund managers, who require a minimum of Sh5 million. A total of 100 million units are on sale at Sh23 each.

A Reit is a unit of ownership in a real estate project allowing retail investors to participate in the capital-intensive sector which has reaped high returns in the last decade.

“The D-Reit opened at the time when Family Bank was selling its Sh4 billion rights issue, and KenGen had just closed its Sh28 billion rights issue, thus there was competition for funds.

READ: Fusion Capital tests market with Sh2.3bn Reits offer

The high networth investors they are targeting, especially the foreign ones, have been fairly reluctant this year to commit money due to uncertainty in the financial markets,” said Kingdom Securities senior research analyst Mercyline Gatebi.

Last year, Stanlib sold the first investment Reit.

Capital issuers usually seek extensions to sale deadlines when they feel the response may not allow them to meet minimum performance target, but also in cases when they think that investors would eventually buy in if given more time to consider the issue.

Fusion Capital CEO Luke Kinoti said in a statement that investors have requested for some additional time to pool resources and prepare their applications accordingly.