Cytonn Asset Managers Limited (CAML) has been granted a Real Estate Investment Trust (REIT) Manager License by the Capital Markets Authority (CMA).
This is the latest development as the country angles itself to launch a REIT trading platform at the Nairobi Securities Exchange.
This is a further positive step for Cytonn Asset Managers, an affiliate of leading real estate firm Cytonn Investments, having been recently granted a license to manage retirement benefit schemes funds by the Retirement Benefits Authority (RBA) in December 2018.
CAML becomes the ninth Kenyan fund manager to be granted a REIT Manager License by CMA. Having the REIT Manager license will allow CAML to register their own REIT products, which include Development REIT’s and Income REIT’s, allowing them to access a pool of investor capital that wishes to take specific real estate exposure.
REIT’s source funds to build or acquire real estate assets, which they sell to generate development returns, or rent to generate income. The income generated is then distributed to the shareholders at the end of a financial year.
Additionally, CMA consented for CAML to proceed and register a number of Unit Trust Funds, the Cytonn Africa Financial Services Fund, Cytonn USD Money Market Fund and Cytonn High Yield Fund.
This is a very important milestone for the firm because it marks the beginning of transitioning the Ksh11 billion (US$109.8) Cytonn High Yield Solutions (CHYS) portfolio, from a private product to a regulated product managed by CAML.
“Kenya’s real estate market has seen exponential growth over the years, and consistently delivered attractive returns to investors. However, a key challenge facing the real estate sector is access to financing away from the traditional sources of funding, which include bank funding. Financing structures such as REIT’s and real estate backed funds such as high yield fund, offer a capital markets based solution to raising funds towards real estate development,” said Maurice Oduor, Principal Officer, Cytonn Asset Managers.
Oduor who spoke on receiving the REIT Manager License said the platform also gives a chance for eligible investors to invest and gain attractive yields, capital appreciation and above-average total returns.
According to the firm, deepening of the capital markets remains a key priority for Cytonn Asset Managers and the REIT Managers license is another positive step forward towards regulated product development.
“This is an important milestone for CAML because it allows us to bring investment grade real estate offerings to a wider pull of clients through regulated capital markets vehicles. This will be the first real estate backed high yield fund in the market and it demonstrates that our capital markets are open to innovation” said. Edwin Dande, Chief Executive Officer, Cytonn Investments.
Cytonn Investments is an independent investment management firm, with offices in Nairobi – Kenya and D.C. Metro – U.S. It primarily focuses on offering alternative investment solutions to Individual High Net Worth Investors, Global and Local Institutional Investors and Kenyans in the diaspora interested in the high-growth East-African region.
It currently has over Ksh82 billion (US$ 818.7) of investments and projects under its mandate, primarily in real estate.