Britam to focus on real estate investments for growth

Asset managers, Britam Holdings, is focusing on real estate business to reduce investment risks and increase investor returns. “As a group, property remains an area of key focus as we diversify our portfolio to reduce risk and meet customer needs,” Benson Wairegi, Britam Holdings Group MD, said during the commissioning of a new floor that was added to the group’s flagship commercial Lang’ata House building in Nairobi at a cost of Sh43.3 million.

Acquired three years ago, the property was structured to provide US dollar-denominated returns, with investors being paid the return on their investments in dollars.  It also became the first unitised property investment in Kenya, allowing individual and institutional investors to diversify their investments.

“We are working on a pipeline to deliver similar investments that are dollar-denominated to shield investors from currency fluctuations,” said Wairegi.

He said they are also restructuring leases, improving efficiency in property management and optimising property asset management.

Located at the Wilson Airport, Lang’ata House has hangar space. It was acquired at a cost of Sh468 million by Britam Asset Managers, the fund managers.

The additional floor is expected to generate annual yields of more than 11 per cent to investors, up from the current nine per cent.

This is significantly above the initial projection of eight per cent in rental yield. The value of the building, which currently stands at Sh550 million, is expected to jump to Ksh600 million with the new floor.

Britam Asset Managers CEO Kenneth Kaniu said that real estate investments such as Lang’ata House are critical to investment portfolios, noting that more real estate investments are to be expected from Britam in the near future.

“Real estate cycles tend not to be strongly synchronised to those of the general economy or other assets... They enhance portfolio returns and introduce an element of portfolio stability. At the end of the day, we would like to deliver strong, long-term, credible returns to our investors,” said Kaniu.