Non-professional investors in the ILAM Fahari I-Reit have three options following a conversion plan from unrestricted to a restricted I-Reit. The proposed conversion of ILAM Fahari I-REIT from an Unrestricted I-REIT into a restricted I-REIT and redemption offer opens on Wednesday.
Following the move, the non-professional investors are left to redeem their units, top them up or be bundled into a nominee account, and accept redemption upon which they will cease to be unit holders. “We are not kicking out the non-professional investors, they will be given the option to apply for additional redemption units during the transaction,” explained Raphael Mwito, CEO ILAM Fahari I-REIT.
“If no action is taken, the non-professional investor will be bundled into a Nominee Account which collectively will count as a professional investor.”
During a briefing, the CEO said the conversion process does not mean ILAM Fahari I-Reit is exiting the main counter of the Nairobi Securities Exchange. He said it will take approximately three years for Fahari I-Reit to be back to the main counter.
“As you are aware, property acquisition takes time, we are safeguarding investors’ money, and to do that, we have to a detailed process that could take time, hence the three-year timeline,” he added.
ILAM Fahari I-REIT currently owns four real estate properties including a shopping centre, an office building and two semi-office/light industrial buildings, all held through special purpose vehicles.
Last month, the Nairobi Securities Exchange’s (NSE) real estate investment trust, ILAM Fahari Real Estate Investment Trust, announced that it has secured regulatory approval from the Capital Markets Authority (CMA) to convert its unrestricted ILAM Fahari Income Real Estate Investment Trust (IFIR) into a restricted I-REIT.
The approval by CMA follows a prior cautionary statement issued in March 2022, revealing that the REIT was undergoing a strategic review involving the operational restructuring of IFIR.
The conversion to a Restricted I-REIT is the initial phase of transitioning the I-REIT’s listing from NSE’s Unrestricted Main Investment Segment to the Unquoted Securities Platform (USP), where it will continue to trade.
The decision to convert and restructure is the result of a comprehensive strategic review conducted in 2021, aiming to address challenges, improve returns, and enhance market performance.
CMA Grants Approval to ILAM Fahari I-REIT’s Operational Restructuring – Kenyan Wallstreet
