Investor ignorance takes shine off Stanlib REIT

Kenya’s first Real Estate Trust (REIT) suffered from lack of investor knowledge and negative performance at the Nairobi Securities Exchange (NSE), experts say.PHOTO:COURTESY

Nairobi, Kenya: Kenya’s first Real Estate Trust (REIT) suffered from lack of investor knowledge and negative performance at the Nairobi Securities Exchange (NSE), experts say.

The Stanlib Fahari I-REIT 47 listed two years ago, shed 47 per cent of its value last year, to close the year at Sh11.65.

This was half of its listing price at Sh20 when it was floated and the peak price of Sh23.75.

“The REIT’s slumped performance reflected the general market sentiment where the bourse closed the year at 8 per cent. It also communicates limited investor knowledge given that REITs are still a new concept in Kenya,” Britam Asset Managers said.

However, in its first earnings release for a seven-month period since inception, the REIT - a company that owns or finances income-producing real estate - reported a total return (capital and income return) of 6.5 per cent.

During the period, the REIT successfully purchased the Greenspan Mall, Bay Holdings – a commercial property in Industrial Area - and Signature International, an industrial property in Nairobi.

The REIT only managed a subscription level of 28.96 per cent.