Capital Markets

Centum Real Estate floats Sh4bn housing bond

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Centum Real Estate managing director Samuel Kariuki. PHOTO | SALATON NJAU

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Summary

  • Centum Real Estate is constructing 1,454 housing units in Ruaraka and Kasarani, as well as high-end duplexes at Two Rivers.

Centum Real Estate has floated Sh4 billion housing bond to finance projects that would deliver more than 1,400 units to the market.

Following regulatory approval by the Capital Markets Authority, the firm, a subsidiary of listed Centum Investment Company #ticker:CTUM, opened the paper on November 13 and closes on December 2.

The property developer is constructing 1,454 housing units in Ruaraka and Kasarani, as well as high-end duplexes at Two Rivers. The firm said it has attained a 75 percent pre-sale level and deposit collections of over Sh2.8 billion.

“The bond offers an opportunity for investors to get a piece of Kenya’s real estate pie without taking the risk of getting involved in actual development of the projects,” Centum Real Estate Managing Director Samuel Kariuki said.

The three-year zero coupon bond will be issued at a discount rate on the three-year Treasury bond, plus a market-determined margin.

Mr Kariuki said the firm will be open to taking up to Sh6 billion if the bond is oversubscribed, supported by strong a balance sheet that currently stands at Sh35 billion.

Centum Real Estate is the holding company for the Group’s Vipingo Development Limited at the Kenyan coast, Pearl Marina Estates Limited in Uganda, Uhuru Heights Limited in Nairobi and Centum Development Kenya Limited.

The firm recently completed and handed over two projects to homeowners in Vipingo and Entebbe, Uganda.

Investors who invest in the issue will have an option of investing in an equity-linked note, giving them exposure to ownership of the housing units.

Centum Real Estate will list the paper at Nairobi Securities Exchange after the ongoing private placement.

The bond will be secured by the projects, with the deposit collections flowing into a sinking fund.