Listed real estate investment trust, ILAM Fahari Real Estate Investment Trust, redemption offer ends today (Friday) with a preliminary positive subscription outlook.
Speaking when he confirmed the redemption offer period close, which paves the way for the conversion process, ICEA LION Asset Management (ILAM) Chief Executive Officer Einstein Kihanda confirmed that the trading of the ILAM Fahari I-REIT will be temporarily suspended from trading at the Nairobi Securities Exchange (NSE) from close of trading on Friday 6thOctober up to Wednesday 25th October in line with the timetable in the Conversion Offering Memorandum and the Public Notice dated 29thAugust 2023.
The offer, which opened 30 days ago, had targeted the redemption of up to 36.5 million REIT units currently trading at the NSE from Non-Professional Investors at a redemption offer price of KSH 11per unit. The redemption offer price represents a premium of more than 82% above the trading price as of the announcement date.
“We are pleased with the market’s positive response to the conversion and redemption offer so far, and we encourage all Non-Professional Investors who are considering redeeming their units to do so or top up to reach the Professional Investor threshold before the offer closes on Friday 6th October at 5:00 pm,” Mr Kihanda said.
ICEA LION Asset Management (ILAM) is undertaking a strategic move to reposition ILAM Fahari I-REIT for growth as envisioned when it went public in 2015. The move has been informed by a strategic review that ILAM undertook in 2021, which sought to understand the challenges the I-REIT faced and develop strategies to improve the returns and market performance.
“The redemption offer is pivotal to our ongoing operational restructuring plan to ensure the REIT’s sustainability and improve its ability to generate returns for unit holders. It is also an opportunity for unit holders whose unit value is less than KSH 5 million to exit the REIT at a premium to the current market price,” ILAM FahariI-REIT CEO Raphael Mwito said.
ILAM received regulatory approval from the Capital Markets Authority (CMA) to convert its unrestricted ILAM Fahari Income Real Estate Investment Trust into a restricted I-REIT.
As part of the offer, Non-Professional Investors also have the option to top up to the Kshs 5 million professional investors threshold as prescribed by regulatory provisions or opt to be bundled under a nominee account holding all non-professional investors.
The REIT Manager has set up the bundled nominee account specifically to cater for Non-Professional Investors who are not able to exit during the transaction period or do not wish to take up the redemption offer, granting them continued participation in the REIT’s growth.
“The REIT Trustee will review all redemption applications, and the unit holders who have successfully redeemed their units will be paid on 24th October 2023, after reconciliation of the transaction,” Mwito added.
ILAM Fahari I-REIT’s portfolio includes four real estate properties: Greenspan Mall, Highway House, a three-storey industrial building off Mombasa Road and 67 Gitanga Place.