The Private Infrastructure Development Group (PIDG), a Western founded infrastructure development finance organisation will take up to a third of the Africa Logistics Properties (ALP)-dollar denominated industrial income property fund.
The fund backed by six governments including the United Kingdom, Netherlands, Switzerland, Australia, Sweden and Canada has committed to invest up to Sh1.9 billion ($15 million) to become the anchor investor in the real estate investment trust (Reit).
The Reit is set to be the first in the industrial real estate sector within the East Africa region.
The ALP Reit is to issue up to 45 million units (shares) including 15 million units or a 33.3 percent ownership to be allocated to the African Logistics Properties Holdings Limited (ALPH) in exchange of property transferred into the Reit.
ALPH as a promoter of the Reit will maintain a minimum unit holding of 20 percent. Other investors are expected to jostle for 15 million units in the restricted offer, which opened on December 17 at a price of Sh129 ($1 per unit).
The offer, which is limited to sophisticated investors who can sink a minimum of Sh5 million in the deal will close on February 27.
PIDG and ALPH will initially hold at least two thirds of the Reit’s issued units or 30 million units.
The offer has a greenshoe option of nine million units or 30 percent of the units available to PIDG and other investors. The Reit was approved by the Capital Markets Authority (CMA) on December 8.
The listing date and start of trading of the units is expected to be March 11.
The Reit will initially consist of two industrial parks; a 50,000 square metre park in Tatu City and a 20,000 square metre park in Tilisi.
PIDG expects its investment in the Reit to mark a significant milestone in the development of Kenya’s institutional-grade industrial real estate sector.
“Having anchored the establishment of Reits for affordable housing in Nairobi, PIDG is familiar with the Reit structure, and we know how it works. We are delighted to expand this expertise into the industrial real estate sector by supporting ALP in developing its Reit,” said PIDG Head of Investment Management Claire Jarratt.
“By building investor confidence, it is anticipated that the ALP Reit will unlock untapped pools of investment from pension, mutual, and life funds, supporting the growth of Kenya’s industrial real estate sector.”
PIDG has made various contributions towards developing infrastructure in Kenya including a Sh2.6 billion ($20.2 million) investment towards establishing the Dhamana Guarantee Company, a firm setup to unlock local currency financing for infrastructure by providing credit guarantees.
