Investment management firm, Cytonn investments is seeking the capital markets authority’s nod to register a Development Real Estate Investment Trust to raise 2 billion shillings. The DREIT, which is structured to pay a coupon over the life of the development, will be deployed for the first phases of two of Cytonn’s real estate projects, the ridge in ridgeways, and river run estates in Ruiru.
According to Bryan Gitia, a real estate investment analyst at Cytonn, Cytonn investments is also looking to raise capital to diversify funding sources for their real estate development pipeline, which has a project value of over 82 billion shillings.
In addition to diversifying for real estate, if approved, the offer will also bring access to high-yielding investments to investors in the regulated markets. Cytonn has traditionally relied on private sector funding, which while easier to access, has been more expensive.
This has therefore 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.