, NAIROBI, Kenya, Jul 17 – The UAP Group is set to issue its Real Estate Investment Trust (REIT) product by December 2014.
Speaking to Capital FM Business, UAP Investments General Manager Peter Ng’eno said the group will offer an income REIT and is in the process of developing the fund following approval by the Capital Markets Authority (CMA) to act as REIT managers.
“A Real Estate Investment Trust is a vehicle that allows investor to participate in property investment. The good thing is that a REIT generates income so every month you will be getting a rental income.”
“There are two kinds of REIT. You can either have a development RIET or an income REIT. A development RIET is where a group of investors get together pool some cash buy a property and develop it. What we are doing is an income RIET so we already have a property, all we have to do is monetise it, “he said.
Ng’eno says the group will put some of its properties in Nairobi into the trust, depending on the size of the asset.
“UAP has a few properties around Nairobi, and we are looking to inject some of those properties into the REIT,” he stated.
He also says the REIT will be traded as a normal stock with no minimum or fixed investment amount for individuals but will attract a fixed amount for institution investors.
“We will put the asset into a fund then put the fund through an Initial Public Offer at the Nairobi Securities Exchange so it will depend with the amount of money you have. If you have Sh10,000 you will buy a few shares… with Sh100,000 a few more shares. The income you receive every month is almost like a rental payment you are getting, “he explained.
CMA has so far approved five companies to act as REITs Managers that include Stanlib Kenya Limited, Fusion Investment Management Limited CIC Asset Management Limited, Centum Asset Managers Limited and UAP Investments Limited.
The licensees seeks to capture investors seeking income, capital gains possibilities and diversification benefits of the real estate class through REITS in property investments.
A REIT manager is a company incorporated in Kenya and licensed by CMA to provide real estate management services under a Real Estate Investment Trust.
On the other hand, REITS are regulated investment vehicles that enable collective investment in real estate where investors, both retail and corporate, are allowed to pool their funds and then engage in real estate projects.