ICEA Lion Asset Managers (ILAM) has announced that it will delist its Fahari income real estate investment trust (REIT) from the Nairobi Securities Exchange (NSE) main investment market segment on February 12, 2024. This decision follows the resolution by unit holders to delist and subsequent approval of the delisting by the Capital Markets Authority (CMA). The last day of trading of ILAM Fahari I-Reit (IFIR) will be Friday, February 9, 2024, according to a statement released by ILAM on Tuesday.
ILAM Fahari I-Reit manager indicated that they are in the process of applying to have the securities admitted for trading over the counter on the Unquoted Securities Platform (USP) of the NSE and are awaiting requisite approvals.
Unit holders of the REIT voted in October to convert the investment vehicle into a restricted entity by redeeming units held by non-professional/small investors. The redemption offer, which ran between September 6 and October, was oversubscribed, posting a performance rate of 113.08 percent after the REIT received applications for the redemption of 41.3 million units against an offer to redeem 36.5 million units. The redemption saw the exit of small investors, who held units valued at less than Sh5 million.
The move to convert the REIT was anticipated to stimulate growth for the investment vehicle, which has struggled to secure funding for new property acquisitions, thus affecting returns paid to unit holders.
“The REIT has not been able to grow in the past few years through acquisitions as unit holders were not able to support a capital raise and property owners were worried about losing value if given units in exchange. The small size of the property portfolio has been problematic due to the high fixed cost of the REIT, which further dampened the returns to unit holders,” ILAM had informed unit holders in its redemption offer.
The Fahari REIT portfolio comprises four properties, including Greenspan Mall, 67 Gitanga Place, Bay Holdings, and Highway House.
The delisting of the REIT was previously scheduled for December 4, 2023, but the trading of units continued into 2024. On Monday, ILAM Fahari I-Reit marked the largest intraday gains on the NSE, closing at Sh6.60. The counter has posted a rise of 4.7 percent on a year-to-date basis.
About ICEA Lion Asset Managers (ILAM):
ICEA Lion Asset Managers (ILAM) is a leading investment management firm based in Kenya, offering a range of investment solutions to institutional and individual clients. With a focus on delivering superior returns and fostering long-term financial prosperity, ILAM is committed to excellence and innovation in the field of asset management.
By: Delino Gayweh
Serrari Financial Analyst
February 8, 2024
