Housing Finance becomes the first company to receive a REITs Trustee license following introduction of the Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2013.
Under the act, a trustee can be a bank, a bank subsidiary or any other licensed company with a minimum paid up capital of Sh100 million. A trustee is also required to demonstrate necessary financial, technical, operational resources and experience in real estate.
The trustee is responsible for the safe custody of the assets for the benefit of unit holders and also oversees the activities of the REIT manager to ensure compliance with the Act.
Commenting on the license, Housing Finance Managing Director Frank Ireri said it will enable the firm increase its non-funded income.
“We are pleased to announce that the CMA has approved the grant of a REITs trust license which will diversify the Group’s interest income and at the same time diversify our assets portfolio,” Ireri said.
REITs are exempt from tax, except for withholding tax on interest income and dividends.
A REIT is a regulated investment vehicle that enables persons to collectively contribute money or money’s worth as consideration for the acquisition of rights or interest in a trust that is divided into units with the intention of earning profits or income from real estate as beneficiaries of the trust.