Unveiling Real Estate Investment Trust in Kenya
For a long time we have had limited knowledge and exposure to variety of real estate opportunities in the Kenyan market. We’ve believed land is the ultimate and only meaning of investing in real estate. Now, here’s your pass to a game-changer available in the landscape of Kenyan real estate.
Kenya is experiencing a real estate renaissance, and you can be part of this exciting revolution as you work to diversify your portfolio. Real estate has both liquid and illiquid assets. You can choose to spend your money to acquire assets that sit in your portfolio for prestige or opt for passive income through these real estate assets. This write-up will guide you through the maze of real estate and more especially to break free from the conventional options and embrace passive income and long-term wealth accumulation.
Disclaimer: Investing in the real estate asset class carries risks, and past performance (empirical data) is not indicative of future results. Make sure to do your own due diligence and if you prefer can consult with a financial advisor and realtor to guide you before making any investment decisions. Be sure to confirm you are dealing with a registered and approved financial advisor and realtor and don’t share your personal details; security details included.
What are REITs?
You’re probably wondering what’s this jargon -REIT; well, let’s unravel it.
REIT in full Real Estate Investment Trust is an entity that owns, operates and manages real estate property that generate income or are under development. A REIT allows investors both retail and commercial/professional investors to put their money in the assets. The investors money is then pooled by the entity and used to finance the management or development of the real estate assets in return the investors benefit from the proceeds generated from the assets.
A REIT has a similar concept to stocks/shares however with the former the entity is purely backed by real estate assets. The income generated from these assets is then distributed to investors in form of dividends just like how a mutual fund would to its investors. Think of a REIT as a pooled investment fund where investors don’t have to buy and manage the real estate properties directly.
In the recent years, we’ve seen REITs being introduced in the Kenyan market. It has been a lucrative addition to the dynamic landscape of real estate in Kenya. We had ILAM Fahari I-REIT as the first listed and regulated real estate investment trust in Kenya. However, it’s since been redeemed and are left with ACORN REITs trading in the market. For more details on ILAM Fahari I-REIT redemption: https://ilamfahariireit.com/press-releases
There are three types of REITs in the Kenyan market: income, development and Islamic REITs. Income REITs (I-REITs) uses investors money to acquire or run income generating income real estate. They are open to retail investors; less capital intensive. Development REITs(D-REITs) on the other hand are for development and construction of new real estate projects. Mostly open to commercial investors as they are capital intensive. As for Islamic REITs are Shari’ah compliant.
Getting Started
In a world where your money can work as hard as you do, REITs are key to unlocking access to passive income. Currently, ACORN I-REIT is available to all individuals (retail investors) again with a similar concept to investing in stocks. It’s simple to get started with ACORN I-REIT via their digital platform called Vuka. Some of the requirements include:
- Carry out a due diligence to confirm it’s listed and regulated by CMA.
- Have your documents ready: Identification, bank details and other personal details.
- Be ready with fund to pay for your annual subscription.
- Have your investment ready.
Be sure to have a write-up with more guidance and explains Vuka as well as investment dynamics.