Cytonn Investments has today announced the closing of Kshs. 1,360,783,260 of privately placed structured notes to individual international and local institutional investors, with Finland-based Taaleritehdas PLC as the anchor investor; Taaleritehdas manages about USD 5 billion and has a real estate partnership with Cytonn.
Elizabeth Nkukuu, CFA, Cytonn’s Chief Investment Officer, said that the funds will be deployed into the real estate sector through its development affiliate, Cytonn Real Estate. “This demonstrates very strong investor interest in real estate and real estate-backed investments in the region because of the attractive risk adjusted returns in real estate. Financing real estate developments for us is a dual opportunity to earn attractive returns for our respective investors, and also to attract international capital, which is critical to financing our growing economy.”
Explaining the focus on real estate, Elizabeth said that looking at the returns from various asset classes over the last 5 years, real estate has delivered the highest returns and is poised to continue to do so over the next 5 to 10 years given the strong economic growth, pent up demand for affordable housing, scarcity of high quality commercial space, and the strategic location of the country as a regional hub.
“Sophisticated investors can already easily access equities, fixed income and private equity; however investment grade real estate investments remain very difficult to access. We are very focused on delivering quality real estate that can attract investors. Real estate is a sector in which we have world-class capabilities, as demonstrated by our ability to attract global investors such as Taaleritehdas. At a time when the Kenya Shilling is depreciating, inflows from foreign investors such as Taaleritehdas are critical to strengthening the shilling.”
The legal transaction advisors were Oraro & Company Advocates in Nairobi and Norton Rose Fulbright in London.
