The earnings, including rent and interest income thereon, represents an annual yield of 8.6 per cent.
China Communication Construction Company Limited, which is building the standard gauge railway (SGR), is the sole tenant of the property called 67 Gitanga Place.
The Chinese conglomerate, which has signed a 5.5-year lease, will be paying rent six months in advance twice a year.
Starting annual rent is Sh66.6 million and the refundable non-interest-bearing deposit, which has already been paid, is Sh25.1 million.
Property fund Stanlib Fahari I-Reit will earn about Sh73.8 million in the first year from the Lavington office building it is acquiring at a cost of Sh850 million.
The earnings, including rent and interest income thereon, represents an annual yield of 8.6 per cent. China Communication Construction Company Limited, which is building the standard gauge railway (SGR), is the sole tenant of the property called 67 Gitanga Place.
“The initial total annual income is Sh73.8 million and there is a 15 per cent rent escalation every two years,” Fahari’s chief executive Kenneth Masika said.
He said the property fund had received all shareholder and regulatory approvals save from the Competition Authority of Kenya, which is expected shortly.
The Chinese conglomerate, which has signed a 5.5-year lease, will be paying rent six months in advance twice a year. Starting annual rent is Sh66.6 million and the refundable non-interest-bearing deposit, which has already been paid, is Sh25.1 million.
Fahari says it expects the property’s expense ratio to stand at 1.5 per cent.
The acquisition will raise the Nairobi Securities Exchange-listed firm’s investment in the office and light industrial property to 34 per cent from 12 per cent.
The property will also increase the share of its assets invested in real estate to 90 per cent, complying with rules governing its portfolio mix. The fund currently holds 67 per cent of its assets in property, falling below the minimum 75 per cent threshold.
