The Capital Markets Authority (CMA) has approved Britam Asset Managers’ licence to handle real estate investment trusts (Reits).
The approval makes Britam the third firm to eye the securities which trade on stock markets but invest directly in properties and distribute profits as dividends. Reits, an investment vehicle for real estate that is comparable to a mutual fund, allows both small and large investors to acquire ownership in real estate ventures, own and in some cases operate commercial properties such as apartment complexes and office buildings.
The regulator in July backed the exemption of Reits from value added tax (VAT) to boost investor appetite and spur interest in the product that opens up the property market for retail investors. Following the nod, Britam said it plans to offer Reits schemes that will be listed to trade at the Nairobi Securities Exchange (NSE).
Britam Asset Managers chief executive Kenneth Kaniu said the company’s investors now have an opportunity to invest in real estate as a viable investment option.
“Real estate is one of the alternative assets that offer steady returns to investors,” Mr Kaniu said.
Stanlib , which was the first to test the Reits market in November 2015, raised Sh3.6 billion against a target of Sh12.5 billion, representing a 28.8 per cent subscription.