Two financial firms get nod to run real estate trustee services

Housing Finance and the Co-operative Bank have become the first two firms licensed to run real estate investment trusts.
This comes as the new investment vehicle takes pride of place at the Nairobi Securities Exchange.

The Capital Markets Authority allowed the two financial institutions to take care of investor’s interests and benefits by working together and overseeing activities of real estate investment trusts managers.

As trustees, the two financial institutions are charged with protecting and maintaining all assets of the real estate investment trust, and ensuring that all filings and registrations are recorded.

Housing Finance managing director Frank Ireri said the licence will enable the firm to increase its non-funded income and diversify its assets.

“We will diversify the group’s interest income and at the same time diversify our assets portfolio,” he said.

After the passage of the real estate investment trusts regulations in July 2013, Centum Asset Managers and UAP Investments were among the first companies to be issued with licences in December 2013.

Others are Stanlib Kenya, Fusion Investment Management and CIC Asset Management.

Regulations for the investment trust are designed to offer retail investors an opportunity in real estate without requiring large sums of money.
It is also hoped that this will make it easier for institutional investors to mobilise funds to pump into the industry and diversify to cut risks.