ILAM Fahari Real Estate Investment Trust 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.
This approval follows a cautionary statement issued in March 2022, indicating that the REIT was undergoing a strategic review involving an operational restructuring of IFIR.
ICEA LION Asset Management (ILAM) Chief Executive Officer, Mr Einstein Kihanda said, “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.”
“A restricted REIT is only for professional investors and this explains why the redemption offer is for Non-Professional Investors. 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,” he added.
The restructuring to a Restricted I-REIT will be the initial step in the process of moving the listing of the I-REIT from the Unrestricted Main Investment Segment of the NSE to the Unquoted Securities Platform (USP) administered by the NSE where it will still trade.
The decision to convert and restructure stems from ILAM Fahari I-REIT’s comprehensive strategic review in 2021, which sought to understand the challenges faced by the I-REIT and develop potential strategies to improve returns and market performance.
“The possibility of moving IFIR back to the main board of the NSE will be reviewed after three years following the successful execution of a growth strategy,” Mr Kihanda said.
The long-term plan will elevate returns and market performance through asset optimization and the growth of Assets Under Management (AUM).
IFIR will remain regulated by the CMA and is registered with the Kenya Revenue Authority (KRA).
In 2022, ILAM Fahari I-REIT’s distributable earnings increased by 39% to KShs. 141.9 million compared to KShs. 102.0 million the previous year.