- ILAM Fahari I-REIT embarks on a Kshs 402 million restructuring effort, offering a premium of over 82% for up to 36.5 million units.
- The REIT’s distributable earnings surged by an impressive 39% to Kshs. 141.9 million in the previous year.
- The upcoming transaction provides an opportunity for IFIR’s Non-Professional Investors to redeem up to 36,585,134 Units, each valued at a redemption offer price of KSH 11 per unit.
ILAM Fahari Real Estate Investment Trust (FAHR), a prominent player in the real estate investment sector, is set to embark on a significant operational restructuring effort.
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The Nairobi Securities Exchange (NSE) listed company is gearing up to open a conversion and redemption offer seeking to redeem up to 36.5 million units, marking a crucial step in its strategic growth plan.
The ILAM Fahari I-REIT, known for its portfolio of high-quality investment real estate properties, including Nairobi’s Greenspan Mall, Highway House, and 67 Gitanga Place, aims to provide sustained returns and operating performance to its investors.
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Einstein Kihanda, CEO of ICEA LION Asset Management (ILAM), expressed his confidence in the proposed Kshs 402 million offer. “This transaction provides a viable path to restructure this popular REIT without the price volatility experienced on the NSE. We are clear that the REIT needs to grow substantially in size to achieve economies of scale, which can only be done through the acquisition of assets,” Kihanda stated.
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What Does The Restructuring Mean For Existing Investors?
During the offer period, non-professional investors (Investors with less than Kshs 5 million worth of shares) will have three options:
- Redeem their units at a Redemption Offer Price of KSH 11 per unit,
- Top up to the Kshs 5 million professional investor threshold as prescribed by regulatory provisions or
- Choose to be bundled under a nominee account.
Raphael Mwito, CEO of ILAM Fahari I-REIT, emphasized the company’s commitment to providing consistent income and capital growth in the long term. “Our active management approach targets quality properties within carefully chosen economically growing nodes,” Mwito explained.
A Year of Remarkable Earnings
Last year, ILAM Fahari I-REIT saw a significant increase in distributable earnings, rising by 39% to KShs. 141.9 million compared to Kshs. 102.0 million in the previous year.
This strategic move follows 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.
IFIR will continue to be regulated by the CMA and registered with the Kenya Revenue Authority, enjoying statutory tax advantages.
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The company anticipates that the restructuring will pave the way for future growth and expansion, ultimately benefiting its valued unit holders. The ILAM Fahari I-REIT remains committed to international standards, offering regular distributions to investors underpinned by commercial leases.
As ILAM Fahari embarks on this transformational journey, investors and industry observers eagerly anticipate the impact of this strategic move on the real estate investment landscape in Kenya.
The company plans to complete this process within a three-year timeline, emphasizing careful consideration and safeguarding of investors’ interests.
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