People walk past the Greenspan shopping mall in Nairobi’s Eastlands. PHOTO | FILE
What you need to know:
Stanlib had identified the mall as the main property for its listed Real Estate Investment Trust offered to the public two months ago.
The transaction was estimated to take Sh2 billion of the Sh3.6 billion raised during the initial public offering.
Stanlib Investments has concluded purchase of Nairobi’s Greenspan Mall and has its eyes on other properties. Stanlib had identified the mall as the main property for its listed Real Estate Investment Trust (Reit) offered to the public two months ago.
The transaction was estimated to take Sh2 billion of the Sh3.6 billion raised during the initial public offering.
“The acquisition is complete and undergoing the final transfer and regulatory process,” said Anton Borkum, chief executive of Stanlib’s Fahari i-Reit.
Greenspan mall is located in Donholm in the populous Nairobi Eastlands, with some of its clients being Tusky’s Supermarket, Ecobank, Standard Charted Bank, National Bank, Bata, Chicken Inn and Pizza Inn. It is estimated to sit on nine acres of land.
Stanlib disclosed it was negotiating for new acquisitions to be loaded on the current Reit.
“As we convert these prospects into bankable deals, we will seek to bring them into the fund. Such acquisitions will benefit from a mix of existing cash resources, debt and a fresh issuance of units,” said Mr Borkum.
The price of the Reit last week rebounded to the listing price of Sh20 per unit after hitting a low of Sh19. Analysts attributed the fall to forces outside the market.
“Reit holders are entitled to dividends and value of the assets are also appreciating; for someone to sell below the IPO price could be personal forces pushing the trade,” said Eric Munywoki, head of research at Sterling Capital, who believes the price will hold between Sh20.50 and Sh21 per unit.
“The undeveloped land of approximately four acres around Greenspan, if developed, would generate more income which could give a higher yield.”
Real estate developers and owners have been keen on the performance of the Fahari i-Reit, seen as key to the future of Reits.
“As our market matures, investors will realise that Reits is a longterm play and not a theatre for shortterm speculative behaviour. Already, this is reflected in the fact that investors are largely holding on to their units,” said Mr Borkum.
Other companies that have registered interest in using Reits to unlock their investments include insurer UAP Holdings, listed investment firm Centum and the National Social Security Fund.
The investment Reits facilitate introduction of an existing property worth at least Sh300 million into the securities exchange through sale of stake to the public. Investors in i-Reit reap the rental income from the underlying property.
A development Reit (d-Reit) allows investors to buy stake in the project before its completion and earn rental income or capital gains upon the property being put into the market.
Centum has declared intentions of using the instrument to raise cash for its Two Rivers project.
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