Residential property developer Mi Vida Homes plans to raise between Sh15 billion and Sh20 billion from both local and international institutional investors in the first quarter of 2026 in what is earmarked to be Kenya’s first hybrid real estate fund.
A hybrid real estate fund is an investment vehicle that is designed to mobilise capital from investors by combining both an Income and Development Real Estate Investment Trust (Reit).
A Reit is a regulated vehicle that addresses the liquidity risk of real estate by allowing individual investors to pool funds and invest in property that would be otherwise out of reach for them in their individual capacity.
Development Reits focus on financing the acquisition of land, construction and development of properties with the end goal being generation of profit by selling or leasing the complete projects to investors.
Income Reits, on the other hand, allow individual players to invest in already completed and income-generating real estate projects and earn revenue primarily through rental income.
Mi Vida, which had earlier planned issuance of a Sh4 billion Development Reit in 2026, says the change in design and amount of its planned fund is geared toward addressing fast growing market demand for institutionalised real estate development.
The company adds that the just concluded management buyout that has seen the exit of the firm’s founding investor, private equity firm Actis, frees it up to tap into local capital to finance growth.
Mi Vida on October 16 announced its management team had signed an agreement to buy out Actis that had owned the property firm for seven years.
“Much as it’s a management buyout, Mi Vida remains an institutional developer because it means now we have the capacity and the opportunity to bring onboard other local institutional capital," Mi Vida CEO Sam Kariuki said.
"Because of the opportunity that we are seeing on the affordable housing side of the market, the plan has always been to raise a fund of some sort. We had planned a Development Reit but now want a hybrid whereby the fund takes on development risk while still holding Income Reit characteristics from a yield perspective."
In setting up the hybrid real estate fund, Mi Vida will be looking to ride on its credentials having been granted the greenlight by the Capital Markets Authority in 2024 to act as a Reit manager in the market.
The company says the real estate fund will be Kenya shilling denominated and is banking on high double digit returns to woo international investors who would otherwise shy away from local currency exposure in their portfolio.
“We are already at the early structuring stages of the fund and from the first quarter of 2026 we should be in the market talking to investors which will be local and also potentially international investors," Mr Kariuki said.
"Even when we will be talking to international investors, they will be required to be comfortable with local currency exposure and as long as the fund yields something in the high teens and early twenties in total return it will meet their hard currency return requirements."
Mi Vida’s planned hybrid fund will be joining the list of regulated assets that target crowding in more investors into real estate as an asset class. So far, ILAM Fahari I-Reit, Laptrust Imara I-Reit, Acorn I-Reit, and Acorn D-Reit are in the market with majority being listed in the Unquoted Securities Platform of the Nairobi Securities Exchange.
