This archive report was first published on 13 July 2021.
On July 13, 2021, the Nairobi Securities Exchange (NSE) and the REITs Association of Kenya (RAK) partnered with Acorn Holdings Limited and ILAM Fahari I-REIT to host a media workshop on Real Estate Investment Trusts (REITs) in Kenya.
REITs are a type of Collective Investment Scheme that allows investors to pool funds to construct or purchase real estate assets, generating income through rentals or sales.
The income is then distributed to the investors, providing a predictable and consistent return on investment.
REITs offer several benefits to Kenyan investors, including the opportunity to invest in the real estate sector without requiring large sums of money and addressing the challenges faced by real estate owners and developers.
According to Wyckliffe Shamiah, Chief Executive Officer of the Capital Markets Authority (CMA), REITs have the potential to unlock the value of the real estate sector by facilitating developers' access to capital, stimulating growth in the capital markets.
Geoffrey Odundo, Chief Executive Officer of the NSE, noted that the introduction of REITs at the NSE was an innovative approach to enable property owners/developers to address finance constraints and offer investors a matched opportunity to access real estate developments.
Kenya became the third African country to establish REITs at the NSE in 2013, with the Kenyan REIT regulations providing three types of REITs: I-REITs, D-REITs, and Islamic REITs.
The NSE currently has three REITs, including the ILAM Fahari I-REIT, which started trading in November 2015, and the Acorn Student Accommodation I-REIT and D-REIT, launched in February 2021.
REITs provide a new investment asset class at the NSE that is accessible to large and retail investors, offering solutions to traditional challenges involved with property investment, such as illiquidity, transparency, and price discovery.
