Real estate developer Fusion Capital has sold 49 per cent of residential units at the Meru property it has invited the public to invest in.
The firm launched the country’s first development real estate investment trust (D-Reit) in June, seeking to raise Sh2.3 billion to complete Greenwood City, a mixed development property in Meru County.
The D-Reit sale offer is set to close today, though the firm has left room for extension to give investors more time to analyse the new offering. However, Fusion and the project founders have already committed Sh868 million, which is 38 per cent of the offer.
Fusion Capital has also confirmed it has secured 21 per cent tenancy on the available retail space, with Nakumatt signing on as an anchor tenant at the development. It has also received bookings from other major outlets, including Optica, Mimosa Pharmacy and beauty products manufacturer Lynne Marie. Greenwood will comprise a shopping mall, office block and two and three-bedroom apartments.
“We will be the first to bring a development of this kind to Meru, offering a holistic live, work and shop experience for county residents,” Fusion Group CEO Luke Kinoti said.
He added that 13 of the 15 planned three-bedroom units have been booked, with each being sold at Sh15 million, while 13 two-bedroom units have been snapped up, leaving 27 others up for grabs. The two-bedrooms are currently being sold at Sh10.5 million.
Fusion listed its D-Reit to raise funds to complete the Meru development and get more Kenyans to invest in real estate development. The firm is selling 100 million shares at Sh23 each. The minimum investment is just over Sh5 million.
“This was a limit set by the Capital Markets Authority [CMA] to ensure the people who buy into the D-Reit are well informed on their investment,” Mr Kinoti said.
The D-Reit is set to be listed at the Nairobi Securities Exchange at the end of this month.
According to Kinoti, Fusion expects to give investors a return within three years of this listing. This means Fusion will aim to sell its commercial and residential units at Greenwood by 2019 at a profit. Kinoti is confident his firm will deliver on this promise.
“Everything is coming together nicely, especially with the recent endorsements from the Government, investors and other relevant stakeholders. This positive reception underpins our bullish long-term outlook on the D-Reit’s future,” he said.
The Retirement Benefits Authority (RBA) recently made it possible for pension funds, which hold close to Sh1 trillion in retirement savings, to invest in the D-Reit, and the Kenya Revenue Authority has said it will exempt investors in the security from paying taxes on what they earn from it.