KEY POINTS
REITS in layman’s terms means-become a landlord with no headache. Real estate Investment Funds in simple terms are licensed investment vehicle which invests and finances income-generating real estate. Kenyans love for real estate has proven to be a very costly affair. Real estate in Kenya has been traditionally perceived to be acquiring land or building rental properties for residential or commercial use. However, these types of Real estate investments have come at a price hence affecting our love for them.
One of the downsides of owning land or property in Kenya is liquidity. You cannot access hard cash on a property in time of need, another issue is rental income is affected by tenancy/occupancy, you also have maintenance costs, property taxes, renovations that are borne by the landlords.
Kenyans have also been victims of getting rich quick schemes that have left many buying breaths of air as land and we have seen in the media how these schemes end up What are REITs?
REITS in layman’s terms means-become a landlord with no headache. Real estate Investment Funds in simple terms are licensed investment vehicle which invests and finances income-generating real estate.
In the developed world most REITS INVEST IN residential buildings, commercial offices, Malls, hospitals, or even the Hotel industry.
The funding is derived from a pool of funds from different individuals/investors who invest in the REIT and in return the investors earn dividend income and capital gains from the investment.
Types of REITS in Kenya
D-REIT -DEVELOPMENT RIETS, purely for development purposes and mostly targeting the institutional clients, high minimum investment required 20 million shillings plus with a lock-in period 5-7years, offered to pension schemes, charitable trusts, SACCOs, corporates, fund managers, and so on.
I-reits-Income reits purely invest ib income-generating properties targeting individual clients, minimum investment 5,000 shillings, no lock-in period, and tradable in the NSE hence quick access to your funds when you need. Chamas are also invited to participate in such.
REITs are managed professionally by a team of developers, property managers, and REIT managers to ensure returns are delivered to the investorsA good example of REITS is the Acorn Students Accommodation Reits that are listed on the Nairobi Securities Exchange and owns the QWETU STUDENT HOSTELS.For a minimum of 5,000 shillings, one gets to own a piece of the QWETU STUDENT HOSTELS and earn dividends income from the rental income generated from their 6 student hostels in Nairobi region.They […]
