NAIROBI, Kenya, Sep 4 – Real estate investment trust ILAM Fahari Real Estate Investment Trust (FAHR) has received regulatory approval from the Capital Markets Authority (CMA) to convert its unrestricted ILAM Fahari Income Real Estate Investment Trust (IFIR) into a restricted I-REIT.
The approval follows a cautionary statement that was issued early last year saying that the REIT would undergo operational restructuring of IFIR.
The proposed Sh402 million transaction will allow IFIR’s Non-Professional Investors to redeem up to 36.6 million units at a redemption offer price of Sh11 per unit.
ILAM Fahari I-REIT currently owns four real estate properties, including a shopping centre, an office building and two semi-office/light industrial buildings held through special purpose vehicles.
“The conversion to a restricted REIT will allow us to offer more specialized investment opportunities to our stakeholders, providing increased flexibility and potential for growth,” ICEA LION Asset Management (ILAM) Chief Executive Officer Einstein Kihanda said.
“A restricted REIT is only for professional investors and this explains why the redemption offer is for Non-Professional Investors,” Kihanda added.
“The Redemption Offer Price of KSH 11 per unit represents a premium of 82.72% above the current market price of KSH 6.02 per unit.”
The decision to convert and restructure stems from the ILAM Fahari I-REIT’s comprehensive strategic review in 2021, which sought to understand the challenges the I-REIT faced and develop potential strategies to improve the returns and market performance.
“ILAM Fahari I-REIT aims to provide consistent income and capital growth in the long term. Our active management approach targets quality properties within carefully chosen economically growing nodes,” said ILAM Fahari I-REIT Chief Executive Officer Raphael Mwito.
IFIR will remain regulated by the CMA and is registered with the Kenya Revenue Authority (KRA).
Last year, ILAM Fahari I-REIT’s distributable earnings increased by 39 percent to Sh141.9 million compared to Sh102.0 million the previous year.
The ILAM Fahari I-REIT’s concept is globally recognised.
It operates in line with international standards, allowing the REIT to own and manage income-generating real estate for the benefit of its investors.
The REIT provides regular distributions to investors, underpinned by commercial leases
