The IFC is considering making a $15 million equity investment in East Africa’s first Income Real Estate Investment Trust, a $120 million investment vehicle sponsored by STANLIB which received the go ahead from Kenya’s Capital Markets Authority earlier this month to list on the Nairobi Stock Exchange’s Alternative Investment Market.
The American DFI’s investment rationale includes the belief that successfully establishing REITs as a liquid financial instrument will increase investor exposure to Kenya’s property sector, which many believe is poised to boom, and unlock significant capital to help narrow the country’ real estate gaps.
Demand for new office space and urban housing is combining to drive significant growth in the property sector. The trust plans to invest in a select portfolio of properties, paying returns at a pre-agreed rate.
Timing for the listing has not been announced. The Summary of Investment Information posted on the IFC’s website states that the proposed investment is pending the approval of the IFC’s Board of Directors.