Centum’s dollar-denominated TRIFIC property fund has met its target of raising Sh3.86 billion ($29.83 million), unlocking funds for the construction of an environmentally friendly commercial property in the special economic zone.
The offer was slightly oversubscribed at 103.3 percent, underlining significant investor appetite for the income real estate investment trust.
Investor bids topped Sh3.99 billion ($30.81 million) against the subscription offer of Sh3.86 billion.
The Two Rivers Special Economic Zone (TRIFIC), which was the promoter of the offer, took up units valued at Sh966.1 million ($7.45 million) in the i-REIT after transferring the TRIFIC North Tower to the property fund, in which it became the first asset.
The TRIFIC North Tower currently has an estimated 16,234 square metres of lettable area, 90 percent of which is already leased to international services firms.
“This is a strong endorsement of the quality of underlying assets and the resilience of our business structure,” said Brenda Mbathi, TRIFIC chief executive officer.
“We are particularly encouraged by the market’s confidence in the TRIFIC Green USD i-Reit as a long-term investment vehicle that aligns sustainable infrastructure development with stable income generation.”
The dollar fund is expected to pay investors a return of around eight percent, with the company planning to issue long-term, dollar-based leases with guaranteed annual escalations on the property to be developed using proceeds of the Reit.
This will enable a currency match between revenues from the property and the expected returns.
Income Reits are structured to purchase and hold property for rental income and are mandated by law to distribute 80 percent of their net profit as dividends to qualify for exemption from corporate income tax.
The successful issuance of the Reit is expected to broaden participation in real estate investment products denominated in foreign currency through the capital markets.
The TRIFIC Green USD i-REIT is the second dollar-denominated real estate investment trust after the listing of the African Logistics Properties (ALP) dollar-denominated commercial property fund in March.
The TRIFIC Reit will be listed on the Nairobi Securities Exchange (NSE) on June 29 at a valuation of Sh4.83 billion ($37.29 million).
