Property fund Ilam Fahari I-Reit (formerly Stanlib Fahari) has reported a half-year to June net profit growth of 13 percent to Sh86 million on increased rental income and reduced operating costs.
The rise, from Sh76.4 million profit posted in a similar period last year, came on the back of rental income growing by 2.4 percent to Sh174.7 million.
The fund, which is managed by ICEA Lion Asset Management after it acquired its rival Stanlib Kenya, however, says it experienced slowed pace of growth in rental income due to the financial hardships facing tenants in the wake of the Covid-19 pandemic.
“Some tenants adversely affected by the pandemic were given rebates, which suppressed the growth in the rental and related income,” said the listed firm.
Interest income declined by one percent to Sh13 million due to downward pressure on interest rates being experienced in the market as the pandemic spreads further.
However, the net earnings were supported by muted expenses during the period. Property expenses reduced by one percent to Sh48.46 million as the fund took measures to cushion from Covid-19 impact.
During the period under review, fund operating expenses also fell by 13 percent to Sh53.42 million mainly in the absence of the annual general meeting (AGM).
The Ilam Fahari says that it has deferred its AGM and other investor briefings to August and this means the costs involved in holding such meetings fell outside the period in review.
“The Reit manager is endeavouring to reduce the expenses further to ensure value addition to the unitholders in spite of the pandemic,” it says.
The fund made a distribution of 75 cents per unit in May for the Sh175.23 million net profit posted in the full year ended December 2019.
Real estate investment trusts (Reits) regulations require such funds to distribute a minimum of 80 percent of distributable earnings within four months after the end of a financial year.
ICEA, owned by the Philip Ndegwa family, took over Stanlib’s operations including the management of Fahari, in May this year.