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Kenya

Better Title administration will spurt REITs growth – NSE

NSENAIROBI, Kenya, Dec 4 – Nairobi Securities Exchange (NSE) Chief Executive Officer Geoffrey Odundo has urged the land ministry to address challenges surrounding land ownership and issuance of Title Deeds in order to spur growth in the Real Estate Investment Trust (REIT) Market.

Odundo said uncertainties over land ownership and delays in issuance of Titles could stifle the growth of the REIT market that was launched in a bid to enable Kenyans invest affordably in the lucrative real estate segment.

He says the exchange is embarking on public education on the REIT market so that Kenyans can take advantage of the offers to come in the future.

“The launch of REITs further enhances financial inclusion in our capital markets as average investors will now be able to invest in large-scale commercial, residential and industrial properties, without requiring large sums of money. I urge other property owners and developers to follow in Stanlib’s footsteps, raising funds to finance their developmental projects through our capital markets,” said Odundo.

He was speaking during the officially launch the trading of the STANLIB Fahari I-REIT shares on the NSE.

The I-REIT’s initial public offer raised over Sh3.6 billion, a material Sh1 billion above the Sh2.6 threshold required for listing.

“As we expand across Africa, we aim to focus on alternative assets and transactions that make a real difference in regions where we operate. Our strategy has always been to identify gaps and present opportunities that help grow economies and further improve the business environment and facilitate trade. The STANLIB Fahari I-REIT is positioned to do exactly that,” said STANLIB Group CEO Seelan Gobalsamy.

The I-REIT is envisioned to invest in properties across the real estate sector which will include shopping malls, offices, warehousing and residential, to name a few.

It has already started investing in some of these sectors which include a modern shopping mall, offices and a warehouse. STANLIB has a footprint in 10 countries in Africa and manages over $46 billion in assets for both institutional and retail clients across Africa.

NSE became the fourth African bourse to launch the REITs market.

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The United States has the world’s most advanced REIT market in the world. Australia, France, Japan, Canada, the Netherlands, Singapore and Hong Kong also have active markets for an asset class whose returns averaged 18 per cent in 2012.

In Africa, growth in this market has been limited by the absence of enabling legislation. South Africa has traded in REITs for the last 10 years, while Ghana has had access to REITs since 1994 and Nigeria 2007.

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