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Real Estate
  • How does someone save when they invest in an off plan compared to buying a ready built house?

    Investing off plan means that an investor purchases property before completion. Off plans are generally driven by the high real estate prices and the longevity of time taken to guarantee delivery of completed units, given the low supply rates of real estate units despite consistently increasing prices. Off plans have become increasingly popular since prices of sold property are lower than market prices. Prices can be upto 50% lower. The sale procedure for an off plan development commences with signing of three documents namely: the letter of offer, the reservation form and the sale agreement. It is usually beneficial to buy real estate off plan since:

    1. Investor benefits from potential high capital gains – Since the investors are acquiring a future asset at current prices and hence in a peaking market buyer attains capital gains and significant margins upon completion.
    2. Flexible payment plans – since all that is needed is a deposit to a tune of 10 to 20% of purchase prices, with the rest of the amount being paid in flexible instalments or upon completion. This allows individuals without adequate finances to acquire a stake in real estate
    3. Preference – Buyers have the concession of choosing the most viable locations and can get houses in line with preferences as opposed to buying a complete house where investors are compelled to settle for left over locations.

    Off plan investment enhances flexibility as it allows investors to make piece meal payments, this allows the investor to save as it reduces balances to be paid upon completion. Moreover, investors can agree with the seller on how balance will be settled and payments can be made as construction continues this allows for better planning and saving

    Investing off plan means that an investor purchases property before completion. Off plans are generally driven by the high real estate prices and the longevity of time taken to guarantee delivery of completed units, given the low supply rates of real estate units despite consistently increasing prices. Off plans have become increasingly popular since prices of sold property are lower than market prices. Prices can be upto 50% lower. The sale procedure for an off plan development commences with signing of three documents namely: the letter of offer, the reservation form and the sale agreement. It is usually beneficial to buy real estate off plan since:

    1. Investor benefits from potential high capital gains – Since the investors are acquiring a future asset at current prices and hence in a peaking market buyer attains capital gains and significant margins upon completion.
    2. Flexible payment plans – since all that is needed is a deposit to a tune of 10 to 20% of purchase prices, with the rest of the amount being paid in flexible instalments or upon completion. This allows individuals without adequate finances to acquire a stake in real estate
    3. Preference – Buyers have the concession of choosing the most viable locations and can get houses in line with preferences as opposed to buying a complete house where investors are compelled to settle for left over locations.

    Off plan investment enhances flexibility as it allows investors to make piece meal payments, this allows the investor to save as it reduces balances to be paid upon completion. Moreover, investors can agree with the seller on how balance will be settled and payments can be made as construction continues this allows for better planning and saving

  • Why was the Amara project late?

    Amara Ridge was set to be launched in February however we had significant delays with the shipment of a finishing component called glass reinforced concrete (GRC). This has since been delivered and the project is set to be handed over in March 2018. Anyone willing to visit the site can do so through the link. http://crm.cytonn.com/clientevents/slug/weekly_real_estate_site_visit

  • Why was Cytonn Towers Launched in October 2017 and yet the construction is to start Quarter 3 of 2018?

    To allow adequate time for detailed design for all components; Architectural, Mechanical and Electrical, Civil and Structural, Facade among others. It will also involve a comprehensive engagement with several government regulators such as NCC, KURRA among others for the infrastructural design. The tendering process to procure a competent contractor will also be part of the activities to be done.

  • Are there any structural issues in your projects?

    There are no structural issues in our projects.  We have an internal Quality Control and Quality Assurance team that visits the sites on a daily basis to vet and ensure the projects meet all the standards. We have hired the best contractors in the market that oversee the development of this sites. To clear any doubt you can also visit any of the sites from the link below http://crm.cytonn.com/clientevents/slug/weekly_real_estate_site_visit

  • What is the ground breaking date for RiverRun project?

    Quarter 1 2018

  • What is the process of doing a site visit to Cytonn Towers grounds?

    Bi-monthly site visits at minimum. Clients interested register with the Client services team the first week and they can be taken to the site the next week. To book a visit please click the link http://crm.cytonn.com/clientevents/slug/weekly_real_estate_site_visit

  • What is the process of a site visit to any of Cytonn’s developments?
  • What is the status of the Newtown project? In terms of ground breaking and Title Deeds?

    Newtown is a masterplan project that will take between 10 to 15 years, which is a standard for projects of such magnitude. The land is being acquired through an extended probate process and that takes time, but we have no doubt that we shall complete. Once the probate process is concluded and transfer done, the title deeds will be issued. We are also in the process of engaging the relevant authorities to build the 10km road connecting the town to the main highway (Mombasa Road), and this too shall take time. Until the transfer issue is resolved we have slowed down on the development. However, we continue to sell it for investors who are taking a very long-term investment horizon that shall not provide liquidity now, but shall provide above average return for the long-term. The concept viability is subject to getting the road however, we are progressing uses that are not dependent on roads such as education.

  • Are there plans to have a project around the Lake Naivasha/Mombasa region?

    Currently, we are not actively pursuing Lake Naivasha and the Mombasa region since they are not part of our focus areas. However, we keep on looking at the market to find out the most viable areas to invest, this means that we consistently maintain an open perspective on all areas.

  • How different are we from other developers in the market?

    Real Estate developers are entities involved in the construction, development and the purchase of property after which they sell as improved land to willing buyers. Cytonn Real Estate is a development firm that aims at developing institutional grade real estate. The firm is well equipped with a team of extensively experienced individuals in the field of real estate who work towards delivering quality as well as aspirational real estate developments that encourages community living. Unlike other developers who focus on data collection and analysis, we go an extra mile and identify existing market niches, inform concept development and enhance market knowledge. This requires adept market understanding that facilitates opportunity identification and manipulation. Our diverse networks that span both locally and globally enable us bring together land owners through Joint Ventures (JVs) and tap into capital. We also encourage investor participation making our clients attain what matters most to them through:

    1. The real estate backed fixed income notes that offer a secure and fixed rate of return over an agreed period of time
    2. The purchase of completed developments in a project through varied payment methodologies for instance cash terms, instalment price, the mortgage option and the zero deposit that gives client leeway to select the most comfortable payment plan for them based on income and cash-flows.
  • What happens if a project that had a larger allocation of funds develops issues and needs to close?

    We focus on diversification of our real estate projects, whose concepts are well researched, conveyancing done and peer reviewed. This are also pre-sold before ground breaking. Therefore, probability if close is fairly low.

Corporate
  • What is Open to Talk

    Cytonn “Open to Talk” initiative primary purpose is to facilitate an open and transparent engagement with all our stakeholders about the social media challenges we have faced. You can view our responses on the link below https://www.cytonn.com/open-to-talk

  • What are the implications of Cytonn listing in the NSE?

    1. Cytonn will have access to the capital markets in the future – the capital markets offer a ready form of funding for companies such as Cytonn, enabling it to embark on growth and expansion plans or to fund its working capital needs with greater ease,
    2. Share price discovery – listing will allow Cytonn’s shares to trade on an official stock exchange, with the price determined by market demand and supply forces. This will allow for generation of a market determined valuation for the company,
    3. Increased transparency and disclosures to the public – when a company lists, it is subject to regulation and hence will be required to disclose certain pieces of useful information to the investing public. Cytonn already engages in such disclosures as can be seen in the investor relations section of our website,
    4. Exposure to public scrutiny – transparency also comes with the possibility of public scrutiny as a company is required to disclose vital information to the public. Given Cytonn is already transparent and operating as a listed company would in that respect, we have already come up with ways to handle public scrutiny, such as the Open to Talk section on our website where all questions from the public are handled in an open and transparent manner,
    5. An improvement on corporate governance practices – listed companies are expected to adhere to corporate governance practices as prescribed by regulation, and the board is subject to various trainings by the Exchange on best corporate governance practices. Cytonn is very keen on good corporate governance and is already operating more or less like a listed company in this regard, with the board having been taken through one of many to come corporate governance training sessions,
    6. Enhanced company image - listed companies are usually well known by the public and viewed as more transparent and credible, having passed the regulator’s keen tests. This will serve to boost already existing confidence in Cytonn and open up the doors to a lot of opportunities it can explore,
    7. Provide existing shareholders liquidity of their shares - once Cytonn’s shares are listed on the exchange, shareholders have an avenue to exit their shares at will to the investing public in the capital markets. However, it is important to note that once listed, the major shareholders are not allowed to sell their shares for 24 months after the listing date to ensure that the owners are aligned to the company’s long term strategy and hence do not dump their shares on other unsuspecting investors,
    8. Make it easier for Cytonn to cross-list on other exchanges – once Cytonn has already successfully listed on the NSE, it will be perceived to have already been through scrutiny and due diligence procedures hence the process of listing on another exchange will be less tedious.
  • Are Cytonn Founder Shareholders flogging their shares out to the Public through a listing?

    Cytonn will be listing by introduction. Listing by introduction is one of the means by which a company can list its shares on the NSE. An introduction is an application for listing of shares already in issue where no marketing arrangements are required. This is because the existing shares for which listing is sought are already of such an amount and so widely held that there would be an open market for the trading in these shares. Since only existing shares are listed by introduction, it follows that no new shares will be issued and no additional funds will be raised. Cytonn is doing this purely for market discovery

  • What is the process of being a supplier in Cytonn and do I have preference if I invest?

    Send your business profile to procurement@cytonn.com one of the team members will reach out within 2 hours and take them through the procurement process. There is no preference given if you are an investor.

  • Cytonn’s standard position and response on any allegation i.e. do we have a standard response?

    We have the open to talk platform that we use to address all the concerns. You can view our responses on the link below https://www.cytonn.com/open-to-talk

  • Is the staff attrition rate high?

    Cytonn through CYLP prepares staff for the market - both at Cytonn and externally. Some staff will leave at different levels of their careers at Cytonn. Second to note is that the Cytonn culture is not a fit for everyone. The fast pace and long working hours especially, make some people leave when they can't keep up. Every successful business has been built through hard work and that is our culture. It’s common for investment and professional services organizations to have high attrition. It’s all the design for our business, to be bottom heavy, so we expect people to leave however, our regrettable attrition rate is low, at 10 percent.

Legal
  • Are the allegations about Cavina School taking Cytonn to court true?

    On the contrary, we have had positive consultative discussions not only with Cavina school but also with other Kilimani stakeholders as part of a wider stakeholder engagement strategy for Cytonn Towers. Cytonn Investments is committed to proactive stakeholder engagement and consequently puts a lot of emphasis on stakeholder participation as part of its mandate in the Real Estate sector. The firm considers stakeholder participation as a cross-cutting continuous process aimed at constructive engagement with the entire spectrum of societal actors throughout the project life cycle.  But fundamentally, we live in a democracy where anyone is free to go to court for whatever reasons, so the allegation that Cavina may be seeking legal redress should be of no concern.

     

  • Who regulates CHYS?

    Cytonn HYS is currently a privately offered solution, offered exclusively to high net worth individuals and is “self-regulated” through its own governance structure of the board, custodian, auditor and principal partner, Cytonn Investments, that is rated by Global Credit Rating (GCR) a credit rating agency

  • Why does my bank or relationship manager talk badly about Cytonn HYS?

    First, it is possible that RMs don’t understand how structured notes work. Secondly, Cytonn HYS offers a very competitive private alternative to fixed-term bank deposits, hence can be construed to be in direct competition. It is not the first time established players have opposed new products. The banking industry was hesitant when M-Pesa was introduced 10-years ago as a new means for money transfer, but today M-Pesa is the leading means to transact cash. Taxi owners and drivers opposed the introduction of Uber, but today Uber is the most used means of cabbing in Nairobi. And established banks ridiculed the transformation of Equity Bank from a building society to a commercial bank, and today it is the largest bank by market capitalization. History is littered with examples of established order talking down innovation and emerging technologies that are perceived as threatening

  • Who does Cytonn HYS target?

    Cytonn HYS targets high net worth individuals and institutions with the capacity to understand the risks and complexity of the investments. They have to go through a prequalification process and be admitted by an existing Partner into the Partnership. It is privately offered

  • How come other fund managers at some point stopped issuing HYS?

    HYS is an unregulated investment solution offered through private channels. Our understanding is that Fund Managers, themselves CMA regulated entities, were issuing HYS in contravention of Section 26 (1) (b) of the Capital Markets Act, which prohibits carrying out “any activity outside the scope of the licensed or approved activities”. The placement has to be structured to conform to the private offers regulations. It is our understanding that other competitors are restructuring their offerings

  • What is the profile of investors in Cytonn HYS?

    Cytonn HYS investors include local high net worth individuals, Kenyans and other East Africans in the Diaspora, local institutions such as SACCOs and chamas, as well as international institutional investors. The leading investor is Taaleri, a USD 7 billion investor based in Finland, whose representative also sits on the Board

  • Is CHYS a Ponzi Scheme?

    A Ponzi scheme involves offering high returns that are not supported by any underlying economic activity or enterprise. Essentially returns are paid out of cash flows from new investors. Any offer of above market returns has to be able to demonstrate the actual assets / underlying economic activity that supports the returns. In the case of Cytonn HYS, the returns are supported by the 10 ongoing and largely pre sold developments

Regional Expansion
  • Do we plan to expand to other areas outside Nairobi?

    Aside from Nairobi, Cytonn has plans to expand to other areas in Kenya and the Region. In Africa for instance, through our regional expansion strategy we plan to expand to neighbouring states with the key focus areas being Uganda, Rwanda and Ghana that continue to present viable investment opportunities supported by both high real estate returns and economic stability. Currently in Kenya, plans to expand beyond Nairobi have seen Cytonn Investments open an office in Nyeri as a proforma strategy to expand to more areas aside from Nairobi. This is in a bid to increase foothold in the various counties and satisfy the growing real estate needs. Whose key drivers are: positive demographic trends such as rapid population growth, the growing middle class, the youth bulge (21-35 years) as well as rapid urbanization, the large housing deficit and devolution that has placed an onus on County governments to improve the real estate landscape. The same deficit exists in the region e.g. Uganda and Rwanda.

Cytonn High Yield Solutions
  • Is Cytonn a bank?

    We are not regulated by the Central Bank of Kenya and are not licensed to take deposits from the public. As discussed above, Cytonn CMS is an investment product not a banking product. Our investment solutions are privately offered investments through the private offers regulatory framework

  • What happens when there is a default?

    To evaluate a default, we need to look at the probability of default and the loss given default. The portfolio contains a highly diversified set of investment grade real estate assets that is selling off plan and liquid investments. Additionally, the corporate guarantee empowers investors to recover any amounts due from the promoter, Cytonn Investments Management Plc. A recent example is the minimal investments Cytonn CMS had in Imperial Bank and Nakumatt Commercial Paper; the defaults were taken up by the promoter, Cytonn Investments Management Plc, hence shielding our investors from any losses

  • How are you able to offer 18% yet banks offering much lower rates?

    Cytonn CMS rate is priced off the loan price market, not off the money markets. Because the funds are mainly used for real estate development, which is mainly sold off plan, the appropriate benchmark is the cost of loans, and the typical real estate developer accesses bank financing at 14% - 18% per annum

  • How come no one else is offering these rates?

    Offering higher than average rates requires a comprehensive platform; the Investment Manager has to have the asset yield that can support the return. The Promoter has to have an investment function that interfaces with investors (Cytonn Investments), and a yield generating function that generates the yield (Cytonn Real Estate). Cytonn is the only brand in this market that has coupled up investment management and real estate development onto one platform. A promoter cannot offer high returns without a high yielding asset to support the return

  • What is the difference between a deposit offering a rate and an investment offering a rate?

    Deposit rates are fixed and guaranteed by the bank, which is regulated by the Central Bank of Kenya. The rate a bank can offer is largely determined by the rate at which they can lend the funds and still keep a margin. On the other hand, an investment rate is determined by the profit returns generated by the commercial enterprise in which the funds are invested, such as real estate development

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