The Local Authorities Pension Trust, the proprietor of Laptrust Imara real estate investment trust (Reit), sold Sh605 million worth of shares in the listed property fund last year, cutting its stake to 91 percent from full ownership previously.
Laptrust Imara I-Reit says this in its latest annual report on sale of 30.25 million shares (also known as units) to an unspecified buyer in two tranches --250,000 units in March 2023 and 30 million units in October 2023.
The pension administrator remains the largest unit holder in the Reit with 315.98 million units valued at Sh6.31 billion while the sold units are held in a custodial account masking the identity of the likely institutional buyer.
The property fund in March 2023 listed 346,231, 413 units worth Sh6.92 billion and valued at Sh20 per unit on the restricted segment of the Nairobi Securities Exchange. The Reit’s promoter had said it would sell its units at negotiated prices as part of its mitigation against unfamiliarity with real estate investment trust products in the domestic market at present.
Only professional and institutional investors qualify to take a stake in the Reit based on its high Sh5 million minimum investment threshold.
The Reit posted a net profit of Sh244 million in the year ended December 2023 and recommended the dividend payout of Sh195 million.
The pension fund is expected to open up the Reit as a regularised mainstream listing after 2026 allowing the units to change hands in normal automated trading.
Laptrust committed to holding the bulk of the Imara Reit units as a means of enhancing investor stability in the product which largely covers the pension fund’s properties portfolio.
“Laptrust Imara i-Reit since listing has traded steadily at Sh20 per unit throughout the 2023 financial year as the promoter (Laptrust) has maintained ownership of their securities in the period,” the Reit manager notes in a report.
The Reit’s total asset value closed December 2023 at Sh7.28 billion and a net value of Sh6.98 billion which translates to a net asset value price of Sh20.17.
The property fund held Sh6.71 billion in property investments at the end of last year with the portfolio covering the fund’s holdings in commercial buildings including Pension Towers, CPF House, Metro Park, Freedom Heights Mall alongside Man Apartments in Kilimani and Nova Pioneer, Eldoret.
Pension Towers in Nairobi’s Central Business District is the highest valued property investment for the Reit at Sh1.2 billion.
Besides the investments in properties, the Reit holds cash and near cash instruments and government securities as part of its investment diversification efforts.
The Reit held Sh397.8 million in cash and near cash instruments as of December 31, 2023 and Sh50.6 million in government securities.
“While we remain committed to the real estate market, we believe it is prudent to diversify a portion of the investment portfolio in the long run. Therefore, we may allocate up to 25 percent of assets to other investment securities to optimise returns of the portfolio as guided by the eligible assets,” the Reit manager Sterling Real Estate Advisory observes.
