Kenya's first dollar-denominated green property fund oversubscribed as investors seek hard-currency returns

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A Kenyan property fund that allows investors to earn returns in US dollars has been oversubscribed by 3 per cent, signalling strong appetite for hard-currency investments at a time when the shilling has faced persistent pressure.

The TRIFIC Green USD I-REIT offer raised a total of Sh4 billion ($30,815,000) against the subscription offer of Sh3.9 billion ($29,832,000), its promoter said on Thursday.

The fund, which will list on the Nairobi Securities Exchange on June 29, is Kenya's second dollar-denominated real estate investment trust.

The promoter said it took up Sh1 billion ($7,458,000) units in exchange for the transfer of the initial asset.

An I-REIT, or Income Real Estate Investment Trust, is a vehicle that pools money from multiple investors to buy and manage income-generating property. By law, such trusts must distribute at least 80 per cent of their net profit to investors as dividends, shielding those payouts from corporate income tax. The TRIFIC fund expects to pay investors an annual return of about 8 per cent in dollars.

The fund is backed by the TRIFIC North Tower, a green-certified office building in Nairobi's Gigiri diplomatic district with 16,234 square metres of lettable space. Teleperformance occupies 45 per cent of the building under a long-term dollar-denominated lease, with the tower 90 per cent leased overall.

The promoter is Two Rivers Special Economic Zone (TRIFIC), a subsidiary of Nairobi-listed Centum Investment Company. Centum, one of Kenya's largest investment firms, has interests spanning real estate, energy and financial services.

TRIFIC CEO Brenda Mbathi described the oversubscription as "a strong endorsement of the quality of the underlying assets and the resilience of our business structure."

She said the fund aligns "sustainable infrastructure development with stable income generation" and that the strong subscription level reflects "deep investor trust in the TRIFIC I-REIT's fundamentals and governance framework."

TRIFIC occupies 64 acres within the wider Two Rivers development on Nairobi's outskirts and has operated under a special economic zone licence since June 2023. The zone is designated a Project of Strategic National Importance, allowing projects to be approved directly by the national government.

NCBA Bank Kenya serves as the REIT trustee, safeguarding investor assets and ensuring the fund complies with its trust deed. NABO Capital is the REIT manager, while KCB Investment Bank acted as transaction adviser, lead arranger and placement agent.

The fund's promoter has put in place several investor protection mechanisms, including cost overrun support, rental income guarantees and a market-making arrangement to ensure investors can sell their units without suffering significant losses.

The TRIFIC I-REIT is the second dollar-denominated real estate investment trust to list in Kenya, following the African Logistics Properties commercial property fund in March.

Successful investors were notified on Thursday, with refunds to be processed on Friday. Settlement is scheduled for June 22, with units credited to investors' Central Depository System accounts on June 26 ahead of trading on the Nairobi bourse.