Stanlib Kenya Seeks Up to $120 Million in IPO of Property Trust

  • REIT will be first to be traded on Nairobi's exchange
  • Regulator says Stanlib offer deepens Kenyan capital markets

Stanlib Kenya Ltd. aims to raise as much as 12.5 billion shillings ($120 million) on the Nairobi Securities Exchange in an initial public offering of a real estate investment trust, the first of its kind to be traded on the domestic market.

The unit of Standard Bank Group Ltd. has appointed SBG Securities, also owned by the Johannesburg-based bank, as bookrunner for the IPO of the Fahari I-REIT, which should take place before November, said Stanlib Kenya Business Development Manager Felix Gichaga.

"This I-Reit offers investors diversification in real estate investments liquidity, because it will be listed on the NSE,” Gichaga said by phone Friday in the Kenyan capital, Nairobi. “It also enables ordinary Kenyans to get exposure to income-generating real estate assets, as the cost of entry is not high."

The Nairobi exchange is sub-Saharan Africa’s third-biggest bourse, with a market capitalization that’s less than a 20th of the South Africa’s and about a quarter of Nigeria’s. Kenya’s Capital Markets Authority said it approved the Stanlib REIT for trading as part of “efforts to deepen and develop the capital markets by facilitating diversification of products available in the market.”

The move enables investors to buy units in the REIT in the same way they buy stock in a listed company, in exchange for rights or a portion of income generated by a portfolio of real estate, the CMA said.

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