STANLIB'S Fahari property Income Reit has excited investors since it started trading at the Nairobi Securities Exchange on November 27, to remain above listing price.
NSE data shows the Income-Real Estate Investment Trust has been trading above the Sh20 IPO price.
The highest gain seen on the unit so far was Sh23.75, which was reached on the first day of trading.
The unit also gained another high trading value averaging Sh22.25 towards the onset of the new year.
The unit closed at Sh20.75 on Monday.
Genghis Capital equities analyst Mercyline Gatebi said most of the activity in the I-REIT has been coming from short-term investors, who have been selling their units to cash in on the gains.
“We have seen a lot of investors offloading lately. However, the unit has already hit an upside and I don't expect more speculation,” she said on phone.
An Income-REIT is a real estate investment scheme which owns and manages income generating real estate for the benefit of investors.
According to Stanlib, the objective of the Fahari I-REIT, which is the first to list on Kenya's securities market, is to provide consistent income and capital growth for investors in the long-term.
Stanlib offered 625 million units priced at Sh20 each during the initial public offer, targeting a maximum of Sh12.5 billion.
The company, however, said it raised Sh3.6 billion from the IPO, 38.46 per cent above the minimum target of Sh2.6 billion.
The minimum investment in Fahari I-REIT was Sh20,000 for individuals and Sh1 million for institutions.
“Introduction of Real Estate Investments Trusts: This was a major addition to the real estate market in Kenya.
Stanlib has already identified three buildings in Nairobi's Eastlands and Industrial Area as priority for the cash from the issue.
Greenspan Shopping Mall in Donholm will gobble up 56.67 per cent of the cash. Stanlib inked a deal to buy the four-storey Greenspan, which has 173,353 square feet of space to let and Tuskys Supermarkets as its anchor tenant, for Sh2.04 billion.
About Sh211 million is being invested in Bay Holdings in Industrial Area, which has 27,329 square feet of space. Bay Holdings is fully-let with a commercial bank among the tenants.
Fahari I-REIT will also pump Sh107.1 million into three-storey, 8,489-square-foot Highway House along Pokomo Road in the same location, which is also fully occupied.
Analysts say the introduction of REITS was a major boost for real estate market in Kenya.
However, they said Kenya should learn from South Africa – world's eighth largest REIT market – in developing its infant market. Ghana and Nigeria are the only other countries in Africa with a REIT market.
“For the other licensed REIT managers looking to list their REITs in the stock exchange, studying Stanlib and other REIT markets in Africa will provide an added advantage to ensure higher levels of success,” the analysts said.