Fahari real estate fund plans to raise Sh9bn in cash call

Real estate fund Stanlib Fahari I-Reit plans to raise Sh9 billion later this year from current and new investors to fund the purchase of more properties.

Fahari in 2015 raised Sh3.6 billion by selling shares, also known as units, to investors seeking a slice of income and capital gains from the property market.

The fund used Sh2.4 billion of the cash to acquire three properties including the Greenspan Mall in Nairobi’s Eastlands and Bay Holdings, an office building in the capital city’s Industrial Area.

“Our initial target was Sh12.5 billion so we want to raise the balance possibly from September this year,” Kenneth Masika, Fahari’s chief executive told Business Daily.

He said the fund needs to build its scale to boost returns to investors as the ratio of expenses to assets will come down.
Fahari has already identified some properties it could buy in the short term. The fund’s chief financial officer Nozipho Makhoba said Fahari intends to acquire an undisclosed property in September for Sh1.2 billion.

READ: Stanlib top managers changed after cash tied up in collapsed banks

Value drop

Fahari’s net asset value per unit stood at Sh19.81 in the 13 months to December, falling below the offer price of Sh20 per unit.

“The net asset value dropped marginally because of initial setup costs of Sh139.9 million,” Ms Makhoba said.

The units traded at Sh10.5 on the Nairobi Securities Exchange on Friday, a 47 per cent discount to the book value.

Fahari announced a distribution of Sh0.5 per unit, representing a 4.7 per cent yield on the current unit price.

The payout will be made on April 30 to unitholders on record as of March 31.
Fahari made a net profit of Sh106 million in the 13 months ended December when its revenue stood at Sh337.5 million.