“The new commitments push Cytonn’s deal pipeline to Ksh56 billion”
NAIROBI, FEBRUARY 18, 2016 - Cytonn Investments and Finland-based NASDAQ OMX listed Taaleri Private Equity Funds are to increase notably their commitment to finance additional real estate projects in Kenya.
Under the allocation increase, Taaleri will provide further development capital that will be deployed to the real estate sector through Cytonn Real Estate, whose deal pipeline now stands at Kshs 56 billion. This was revealed after an executive team from Taaleri, led by Taaleri’s Founding Partner and Legal Counsel Marko Backström and Private Equity Analyst Pontus Oinonen, visited Cytonn offices in Nairobi to complete documentation as well as visit Cytonn’s ongoing development projects.
Cytonn Real Estate, an affiliate company, has been undertaking a number of real estate projects in Kenya, with an 85% focus towards the low to mid-income segment of the housing market. Last year, they broke ground for Amara Ridge in Karen, while the 400-unit lifestyle community in Ruaka, The Alma, which will cost Kshs. 2.5 billion as well as the gated community in Karen, Situ Village, which will cost Kshs. 4.0 billion shall be breaking ground during the first half of the year.
“We are glad that in Taaleri, we do not only have a financier but also a partner who is walking the journey with us as we continue to create wealth for our clients, build safe neighborhoods for families and create employment opportunities for Kenyans,” said Cytonn’s Chief Investments Officer Elizabeth Nkukuu. She added “TTA has previously financed over Kshs 2 billion of our real estate developments, and we are glad that they have increased their funding commitment, a testament to our capabilities in fund-raising, as well as being able to demonstrating exits for our institutional investors.”
Looking at the returns from various asset classes over the last 5 years, research has consistently shown that 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, demand for affordable housing, scarcity of high quality commercial space, and the strategic location of the Kenya as a regional hub.
Taaleri, which recently rebranded from Taaleritehdas PLC, launched its first Africa fund in 2014 following a success of series of European real estate funds. The firm manages USD5 billion of investments across asset classes globally. In addition to Kenya, the fund has a number of real estate investments in Rwanda and Mozambique.
Head of Africa at Taaleri, Antti-Jussi Ahveninen, spoke highly of Cytonn’s commitment as an institutional partner in real estate.
“Our increased commitment towards funding Cytonn’s real estate developments highlights our goal of creating long-term and sustainable partnerships in the Eastern African region. Institutional partners such as Cytonn, who have demonstrated investor focus, world-class development procedures, and the ability to exit, are key partners for global institutional investors such as Taaleri as we look to continue investing in the region. The increased commitment works well for everyone, as Taaleri is able to allocate capital towards institutional real estate developments with attractive structures, while Cytonn has a faster avenue for execution of their Kshs 56 billion deal pipeline.”
