Market News

Cytonn eyes Sh5bn bond in Kiambu housing plans

shiv

Mr Shiv Arora, Cytonn's head of private equity real estate. file photo | nmg

Real estate-focused private equity fund Cytonn plans to float a Sh5 billion housing bond by year-end, partly to finance projects that should deliver more than 600 units to the market.

The PE firm is seeking a financial consultant to steer the listing of the proposed mid-term note and advise on the tenor, pricing and tax-exemption eligibility of the debt security to be listed on the Nairobi Securities Exchange.

Proceeds from the real-estate bond for development of 246 apartments in a project dubbed Taraji Heights in Ruaka and The Ridge (370 units) in Ridgeways, both in Kiambu County.

“We think there is a lot of appetite for such a product given the great returns from real estate. There is a lot of institutional capital seeking higher returns from alternative investment classes,” Shiv Arora, head of PE at Cytonn, told the Business Daily.

“The request for proposal closes in two weeks’ time. If successful, we plan to list the notes this year.”

He said other sources of capital for the Taraji and The Ridge would come from Finnish asset manager Taaleri, which has been financing Cytonn projects, as well as debt.

Mr Arora said Cytonn currently has Sh74 billion worth of assets under management, mostly real estate where it hosts 12 projects. Other investment classes are PE, equity markets and structured solutions such as cash management.

State-owned National Housing Corporation mooted plans to float a Sh5 billion housing bond in January 2015 but the offer is yet to open.