Welcome to wazua. I will be the first to admit. I'm estimating below 10.00 in the next 12 months

Development REIT would be more risky ..it would be similar to Home Africa,with I-REIT the returns will be steady and consistent if they buy into the right properties at the right price.
The big question is 'How good are they at buying good properties'.The jury is out on this and that's why I would keep off.

Development REIT might present higher returns but it also comes with higher risk,as they are too many variables at play such as sales&cashflow, project completion,regulatory approvals etc.That's why Home Africa in its first year of listing declared hundred of millions in profits but today it is declaring losses in the same magnitude.
To know if a property has been bought at a premium you need to look at the rental yields.A property giving rental yields of above 15% is a good property,and I think i read somewhere they are targeting a yield of 14% which is not too bad if achieved.
At the end of it all an investor seeks to strike a balance between risk and return.An I-REIT if properly managed can give annual income above that of a Treasury bond,and to cap it all we have capital gains on the properties.
Anybody wishing to get into the real estate in the future for a steady stream of annual income and does not have the resources (time and money) and knowledge ought to have a keen look at I-REIT's

3. What is the Asset allocation profile of STANLIB’s Fahari I-REIT asset base?
At least 75% of the REIT Scheme’s Total Asset Value (TAV) may be invested in eligible real estate, while a maximum of 25% of the REIT Scheme’s TAV may be invested in eligible cash investments.
Of the eligible real estate allocation, investments shall be principally in the following sub sectors:
 Mixed-use developments
 Retail (shopping centres)
 Commercial (offices)
 Industrial (warehousing and logistics)
 Hospitality (hotel and resorts)
 Residential
 Specialised buildings (student accommodation, schools, manufacturing facilities or hospitals)
 Land assembly for eligible real estate

The sector allocation for the 75% to 100% of eligible real estate should not exceed the following bands:
 Retail: 30% to 75% of TAV
 Office: 30% to 75% of TAV
 Industrial: 0% to 15% of TAV
 Hospitality: 0% to 15% of TAV
 Other: 0% to 15% of TAV

4. What is the criteria for eligible cash and real estate assets?

Eligible real estate assets include, but are not limited to:
Strategic real estate in Kenya, via the following investment instruments;
o Land Title (direct ownership of the property asset), including leases with minimum 25 years remaining
o 100% ownership of any Company that owns the property asset with the property asset being transferred directly into the REIT Scheme if deemed necessary by the REIT Manager and Trustee in order to access fiscal benefit
o 100% beneficial interest in an Investee Trust

Eligible cash investments include:
 Cash & deposits
 Bonds
 Securities
 Money market instruments

8. Will unit holders receive dividends going forward?
Given that the main source of income is net rental earnings from rentals from eligible real estate investments owned directly by the STANLIB Fahari I-REIT and dividend income from wholly-owned subsidiary companies that own eligible real estate investments, the steady stream of cash inflows guarantees investors of dividends going forward.
The minimum distribution shall be 80% of the profit after tax excluding unrealised fair value gains.

9. What are risks specific to the STANLIB’s Fahari I-REIT Structure?
Market Risk: This is the risk that prevailing market forces of demand and supply may negatively impact the REIT Scheme’s underlying asset values and its ability to attain the projected performance. The market values of the Seed Properties and other properties that the Scheme owns may be impacted by fluctuations in supply and demand for rental
properties in Kenya.
Income Risk: Reduction in reported rental income and operating profits may arise, for example, if tenancy agreements of the underlying properties are renewed at a lower rental rate than the previous agreement or if the occupancy rate falls that in turn,
reduces property income and STANLIB Fahari I-REIT’s ability to recover certain operating costs such as service charges.

10. Are there measures taken to facilitate steady cash flow stream going forward?
Various measures have been taken to mitigate income risk. These include: income flow management; lease audit and data integrity review; vacancy management and leasing strategy; review of lease structures; and cost optimisation management.
In particular, the leasing strategy will include procuring of payment upfront and contractual lock-ins of rental rates and other clauses in tenancy agreements as well as a 6 month non-renewable lease notice.

D&B Coverage: cont





FFO = Funds From Operations

sasa nimekubali. This one will be eaten alive