Lack of information blamed for low real estate investment trusts uptake
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Loading... - Eucabeth Farah
- 27 Apr 2023
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Players in the real estate sector have cited the lack of information on how Real Estate Investment Trusts (Reits) work as one of the reasons for the low uptake of the investment vehicle.
CPF Financial Services Chief Executive Hosea Kili said pension funds are ideal for investing in Reits, but many Kenyans are not familiar with how they work.
Reits are specially designed investment vehicle which allows one to earn from real estate but without the capital intensity that comes with it.
They allow one to buy a piece of an investment for as low as Sh500 and receive dividends through rental income in the case of I-Reit
As such, Reits open the real estate sector to the masses who can own part of the business through pension funds. Mr Kili said leveraging Reits can unlock the required liquidity for the government’s affordable housing agenda.
Student accommodation
Speaking at the listing of Imara I-Reit by Local Authorities Pensions Trust (Laptrust) at the Nairobi Securities Exchange last week, he cited Acorn, which has invested in student accommodation using Reits.
“I challenge other trustees and pension funds to borrow a leaf from Laptrust and invest in Reits as opposed to investing in brick and mortar. Let us leave the business of brick and mortar to the developers,” said Mr Kili.
He said Reits have transformed the real estate sectors in South Africa and the United Kingdom, and the same can happen in Kenya. Read More…
