Britam Asset Managers has received a license from the Capital Markets Authority to operate as a REITs (Real Estate Investment Trusts) Manager.
The asset management subsidiary of Britam Holdings Plc is now among the few companies in Kenya who have been licensed by the regulator to offer REITS as an alternative investment vehicle.
REITS are regulated investment vehicles that allow collective investment in real estate where both retail and corporate investors pool their funds and then engage in real estate projects. REITs may invest in the properties themselves, generating income through the collection of rent, or they may invest in mortgages or mortgage securities tied to the properties, helping to finance the properties and generating interest.
“We are pleased to advise that the authority has approved the grant of a REIT Manager licence to Britam Asset Managers Limited. This licence will remain in force unless otherwise suspended or revoked following the necessary due process,” said Mr Paul Muthaura, the CMA Chief Executive Officer.
Speaking after receiving the licence, Britam Asset Managers Chief Executive Officer Kenneth Kaniu said the company’s retail and institutional investors now have the opportunity to invest in real estate as a viable investment option as REITS allow anyone to invest in portfolios of large scale properties the same way they invest in other sectors.
REITS, he said, enjoy tax exemption, offered high returns, capital appreciation, and are risk free as they invest in the lucrative real estate sector.
“Real estate is one of the alternative assets that offer steady returns to investors. However, many retail and institutional investors have been locked out of investing in this class due to the fact that real estate is offered in large blocks, and also requires heavy capital investment.” Mr Kaniu said.
Mr Kaniu said that going forward, the company will be looking to offer Real Estate Investment Trust Schemes that will be listed to trade at the Nairobi Securities Exchange.
REITs provide an investment opportunity that allows small and medium scale investors to invest in the lucrative real estate sector. These investors who would otherwise be locked out of this industry due to the high cost involved in purchase and development of Real Estate.
They operate in a similar manner as shares and securities in a company and they may also be listed in Securities Exchange. REITs allow investors to gain stake in already existing real estate property or in properties being developed, like they would gain stake in a company.
Investors invest by subscribing for an issue of REIT securities or by acquiring REIT securities in a secondary market. They may only exit the investment in the REIT securities by selling the units in a secondary market.