Listed real estate firm ILAM Fahari I-REIT has posted a double-digit profit growth in the half-year ending 30th June 2025, driven by improved mall occupancy and disciplined cost control.
- •The trust’s latest results also highlight unresolved challenges—most notably, eroded rental income and muted long-term growth compared to its pre-pandemic peak.
- •Net profit rose 20% year-on-year to KSh 64.3 million, recovering from last year’s earnings trough.
- •The turnaround was underpinned by higher rental collections, as occupancy at Greenspan Mall jumped to 86% from 75%, and a 5% rise in interest income.
| Metric | HY2025 (30 Jun) | HY2024 (30 Jun) | YoY Change |
|---|---|---|---|
| Rental & Related Income | 142,770,285 | 138,738,189 | +2.9% |
| Interest Income | 26,242,474 | 24,931,315 | +5.3% |
| Total Revenue | 145,907,784 | 140,029,401 | +4.2% |
| Operating Expenses | (104,664,188) | (109,842,306) | -4.7% |
| Profit for the Period | 64,348,571 | 53,827,198 | +19.5% |
| Distributable Earnings per Unit (KSh) | 0.36 | 0.30 | +20.0% |
| Net Asset Value per Unit (KSh) | 19.71 | 17.87 | +10.3% |
| Total Assets | 3,661,667,147 | 3,377,646,332 | +8.4% |
| Cash & Cash Equivalents (end) | 91,386,619 | 244,649,179 | -62.6% |
| Change in Fair Value of Inv. Property | (3,137,499) | (1,291,212) | -143% |
| Distribution Paid | (54,291,690) | (126,680,610) | -57.1% |
Total revenue grew to KSh 145.9 million, a modest 4.2% gain, while operating expenses eased by nearly 5% to KSh 104.7 million.
Distributable earnings per unit increased to KSh 0.36, but remained far short of the KSh 0.48/unit highs seen between 2020 and 2023.
The board declared no interim payout, sticking to a more conservative cash strategy after last distributing KSh 0.30 per unit in April for FY2024.
Five-Year Trend: Rental Weakness, Cost Stickiness, Value Erosion
A review of Fahari I-REIT’s half-year numbers since 2020 underscores the scale of the challenges:
- •Rental & related income has shrunk 20% from its HY2023 peak, as lost anchor tenants and weaker office demand continue to weigh.
- •Net profit, despite 2025’s rebound, remains 25% below pre-2023 levels. The trust has yet to regain its KSh 86 million per half-year profitability seen in 2020–2023.
- •Operating expenses have remained stubbornly above KSh 100 million, despite energy-saving efforts and business restructuring.
- •Asset revaluations have turned negative over the last two years, erasing the fair value gains that previously supported profits.
- •Net asset value per unit is up from last year but still below 2021, underscoring limited asset growth.
- •Cash balances have swung sharply, with June 2025 cash of KSh 91 million well below last year’s KSh 244 million and reflecting lower earnings and more cautious distributions.
Balance Sheet, Cash Flow, and Risk
ILAM Fahari I-REIT remains ungeared—carrying no debt—offering some balance-sheet resilience in a rising rate environment. However, total assets of KSh 3.66 billion are still below the KSh 3.9 billion recorded at the end of 2021. Cash flow from operations has been solid, but large, lumpy distributions and volatile revaluation outcomes have kept payout ratios and cash coverage under pressure.
Management’s efforts to boost occupancy and contain costs have stabilized short-term performance, but the long-term trend remains weak. Without sustained rental growth and a turnaround in asset values, the REIT’s ability to restore historic payouts and NAV growth is in question.
Fahari remains a play on Kenya’s recovering retail property sector, but persistent structural headwinds mean that its best years—at least for now—remain in the rear-view mirror.
