Investor manager Cytonn has approached the Capital Markets Authority (CMA) in a bid to seek authority to raise 2 billion from the public through their maiden Development Real Estate Investment Trust (D-REIT).
This is a new initiative as the company has traditionally sort funding via private schemes.
“Cytonn has traditionally relied on private sector funding, which while easier to access, has been more expensive. This has thus necessitated the development of alternative sources of funding, allowing development of institutional-grade real estate at a relatively lower cost, thus maximizing the returns to investors,” noted the company in a statement.
The move to raise capital from members of the public is a cheaper option. If approved, the firm will have less pressure to raise funds to pump into its multi-billion projects.
The projects that will benefit from this initiative are located in Kiambu’s Ridgeways and Ruiru.
“The Ridge is a comprehensive aspirational lifestyle development on 10 acres in Ridgeways where stage one of the development is complete — including land acquisition, concept, foundation and is 50 percent presold; funds will go towards the second stage of superstructures construction,” Cytonn Real Estate Investment analyst Bryan Gitia said.
However, Cytonn will not list the REIT at the Nairobi Securities Exchange (NSE) in the interim.