ILAM Fahari Real Estate Investment Trust (ILAM Fahari I-REIT) has received the approval of its unitholders to undergo a major operational restructuring and delisting.
The unitholders passed all the resolutions recommended by the REIT Manager and the Trustee during an Extraordinary General Meeting (EGM) held on Friday, November 24th.
The resolutions include:
- Converting ILAM Fahari I-REIT from an unrestricted to a restricted I-REIT will allow it to pursue a more focused investment strategy (93% approval).
- Delisting ILAM Fahari I-REIT from the NSE will provide greater flexibility in managing the REIT’s portfolio (92% approval).
- Quoting ILAM Fahari I-REIT units on the Unquoted Securities Platform (USP) managed by NSE will enable the unitholders to trade their units with non-professional investors bundled into a nominee account (92% approval).
- Authorizing ICEA LION Asset Management (ILAM) and the Co-operative Bank of Kenya as the Manager and Trustee of ILAM Fahari I-REIT to take all the necessary actions for the conversion and delisting (92% approval).
ILAM Chief Executive Officer Mr Einstein Kihanda said that the restructuring will boost the growth and expansion of the REIT, and pave the way for strategic acquisitions and a solid financing strategy.
“This special resolution marks a pivotal moment in our journey towards the growth of the REIT. The unitholders have reaffirmed their commitment to the Management to pursue the growth and expansion plan. This decision paves the way for strategic acquisitions and a solid financing strategy,” Mr Kihanda said.
“We embark on this path with gratitude for the support received from the Unitholders, and we are now ready to propel our REIT towards its envisioned success. We are also grateful to the CMA and NSE for the support provided during the restructuring exercise.”
Lydia Rono, the Chairperson of the Board of Trustees from the Corporate Trustee Services at the Co-operative Bank of Kenya Limited, said that the intention is to grow the REIT with expectations of double-digit growth. She said that the restructuring will allow them to serve the unitholders’ long-term interests better and deliver enhanced value.
ILAM Fahari I-REIT Chief Executive Officer Raphael Mwito said they seek high-quality assets in prime locations with strong tenants, aiming to double their portfolio value from Kshs. 3.5 billion to Kshs. 7 billion within the next three to four years.
The restructuring is expected to create several benefits for unitholders, such as:
- Increased flexibility to pursue a broader range of investment opportunities, such as direct real estate acquisitions and developments.
- Improved ability to align the REIT’s investment strategy with the long-term needs of its unitholders.
- Reduced costs and risks associated with listing on the NSE, such as regulatory compliance and market volatility.
- Enhanced transparency and accountability through annual audits and reports on the privatisation programme.
