Looking For A New Option In REITS? Try Kenya 2
NAIROBI, KENYA - OCTOBER 20, 2014 : Courtyard surrounding the Jomo Kenyatta statue in front of the Kenyatta International Conference Centre in the central business district of Nairobi

Kenya will welcome its first real estate investment trust (REIT) this November. Fahari I-REIT, issued by the Kenyan unit of Standard Bank, has announced plans to raise US$ 120 million for the IPO after it received regulatory approval for the listing in October 2015. The REIT aims to provide Kenyan investors with exposure to local real estate assets.

Interestingly, another real estate investment vehicle announced plans to list in Kenya just a few weeks prior, albeit with a fundamentally different agenda. St Paul’s Property Trust revealed in September that it had chosen the Nairobi Stock Exchange, sub-Saharan Africa’s third-biggest bourse, to raise US$ 76 million for its UK property investment company. St Paul’s has said they would use proceeds from the IPO to buy high-grade rental property outside London that can house government departments.

With a total market capitalization of approximately US$ 20bn, Kenya’s exchange comprises less than five percent of the tradeable assets boasted by the Johannesburg Stock Exchange (JSE), Africa’s largest. For its part, the JSE already lists several foreign property vehicles. Nonetheless, St Paul’s is betting on pent-up demand from local pension funds and other institutional investors who seek increase asset-backed exposure to higher-rated foreign markets. The company, registered in the Isle of Man, could become a roadmap for others who want to gain access into the outsized pools of capital now flowing out of larger African economies and into the UK.

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