“There is a significant increase in vacancy compared to that reported as at 31 December 2022 due to the reason explained. The Reit manager is working on letting out the space at 67 Gitanga Place within the year in a bid to reduce the portfolio vacancy,” noted ICEA Lion Asset Management which runs the real estate investment trust.
The property that also features a basement parking measures 0.2830 hectares and has an unexpired leasehold term of 92 years as of June 30, 2023. Cumulatively, Fahari’s property portfolio has a vacancy gross lettable area of 92,228 square feet.
Greenspan Mall has the largest lettable area at 43,278 square feet following the loss of its anchor tenant Tuskys, last year.
While Naivas stepped up to take the role of the anchor tenant, the retailer did not take the entire of the previously occupied space resulting in the higher vacancy rate.
ICEA Lion says it is working on initiatives to cover the unoccupied space.
“The Reit Manager is working on a strategy to repurpose the 17,000 square feet left behind by the anchor tenant at Greenspan Mall to enable uptake and reduce vacancies at the mall,” the Reit manager added.
The reduced occupancy rate on Reit’s property has been dragging down the fund's ability to raise income from rental charges.
Only Bay Holdings, a 33,265 square feet property in Nairobi’s industrial area is fully let out to three tenants including Imperial Bank, Packard Limited and Man-hat Equipment Limited.
Fahari’s last property in Highway House is also currently unoccupied and has been vacant since April 2018.
The three-storey commercial building is located on Pokomo Road off Mombasa Road and sits on a land parcel with a leasehold term of 33 years. Fahari posted a net profit of Sh86 million in the six months to June as higher costs offset revenue growth.
The fund saw rental and related income grow by 5.6 percent to Sh117.8 million on rent escalation.
Fahari had Sh3.4 billion in total assets under management comprising Sh2.9 billion investment properties.
