Cytonn Investments, a leading alternative investment management firm in the East African Region, has filed an application with the Capital Markets Authority (CMA), to register a Development Real Estate Investment Trust, (DREIT), seeking to raise Kshs 2.0 billion of capital. The DREIT, which is innovatively structured to pay a coupon over the life of the development, will be deployed for the first phases of two of our real estate projects, The Ridge in Ridgeways, and RiverRun Estates in Ruiru.
This capital raise is envisioned to help Cytonn diversify funding sources for their real estate development pipeline, which has a project value of over Kshs 82.0 billion. Cytonn has traditionally relied on private sector funding, which while easier to access, has been more expensive. This has thus 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. Following the acquisition of financing for bank debt for The Alma from SBM Bank, Cytonn is now pursuing regulated DREIT funding.
Addition to diversifying for real estate, if approved the offer would also bring access to high-yielding investments to investors in the regulated markets. With the transition to regulation through Cytonn Asset Managers Ltd, regulated by the Capital Markets Authority and the Retirement Benefits Authority, Cytonn is now inclined toward bringing access to high-yielding alternative investments to the regulated markets.
“If successful, the funds will be deployed to towards the development of Phase 1 of The Ridge and Phase 1 of RiverRun Estates. The Ridge is a comprehensive aspirational lifestyle development on 10 acres in Ridgeways where stage one of the development is complete – including land acquisition, concept, foundation and is 50% presold; funds will go towards the second stage of super structures construction. RiverRun is a masterplanned mixed used community on 100 acres in Ruiru, with a dedicated affordable housing component.” said Bryan Gitia, Real Estate Investment Analyst at Cytonn. “The capital raise is in line with Cytonn’s strategy, through which landowners connect with institutional capital and development capability onto one platform. This strategy creates jobs, grows the economy and improves the standards of living in Kenya,” added Bryan.
The offering is being advised by the following:
- The Transaction Advisor is Standard Investment Bank,
- Legal Advisors are KN Law LLP,
- The Reporting Accountants are Baker Tilly Merali’s,
- The Trustee is Housing Finance, and,
- The REIT Manager is Cytonn Asset Managers Ltd.