Financial results
The REIT has delivered growth of 221% in earnings for the 6 month period ended 30 June 2017 compared to the restated comparative period ended 30 June 2016. This performance is attributable to, among other things:
- Income contribution from the two office and light industrial properties acquired at the end of June 2016. These properties contributed a combined KShs 15.9 million to net income during the first half of 2017.
- Significant reduction in fund management costs; the comparative period was marked by one-off set-up and listing costs some of which could not be capitalised to equity, such as promotional and marketing expenses, legal and tax advisory etc.
- Finance cost savings of KShs 23 million compared to the comparative period.
- Healthy vacancy factor; vacancies continued to be under control at a total portfolio vacancy rate of 5%.

Borrowings
STANLIB Fahari I-REIT is currently ungeared. The planned acquisition of additional property may lead to gearing until such time that additional equity is raised.

Change of directors of the REIT Manager
The following directors of the REIT Manager resigned during the period under review:

1. Wanjiru Mwangi, Non-executive chairman, resigned 14 June 2017
2. John Mackie, Non-executive director, resigned 17 February 2017

26 September 2017

STANLIB FAHARI I-REIT IS GRANTED EXTENSION TO INCREASE PROPERTY
PORTFOLIO TO 75%

We hereby notify all STANLIB Fahari I-REIT unitholders that STANLIB Fahari I-REIT has been granted an extension by the Capital Markets Authority to comply with the requirements of Regulation 65(6) of the Capital Markets (Real Estate Investment Trusts) (Collective
Investment Schemes) Regulations, 2013 (“the Regulations”).
Regulation 65(6) requires a REIT to invest at least 75% of its total net asset value in income producing real estate within two years of being authorised as a REIT scheme. Currently, STANLIB Fahari I-REIT’s investment property, valued at KSh 2.435 billion, accounts for 68%
of the fund’s total net asset value, resulting in a shortfall of approximately KSh 245 million. In order to comply with Regulation 65(6), STANLIB Fahari I-REIT has to increase its property
holding to 75% by 30 September 2017.

We remain committed to sourcing high quality property assets that will enhance STANLIB Fahari I-REIT’s existing portfolio, contribute to sectoral and geographical diversification and also contribute positively to the property returns. Unfavourable pricing of property deals in the market has been the single most contributing factor to the inability to conclude a transaction in the best interest of the unit holders.
Given the status of current negotiations, the REIT Manager is confident that a suitable property transaction will be concluded in the forthcoming months, thus enabling STANLIB Fahari I-REIT to remedy the regulatory non-compliance within reasonable time.

We look forward to updating you on our return to a compliant state in the near future.


STANLIB Kenya Limited
REIT Manager

It's an I-reit not a D-reit so they will not be building their own properties. 8% yield is the normal in Nairobi despite what you hear real estate does not yield that much. The capital gains is what you chase

You forget that a yied of 7% and the property will be partly financed through loans. That yield assumes 100% occupancy which is not always the case. At 7% or less rental yield, and with interest payments that fall due, how much will they be actually making??? The big question, does it make financial sense to invest in a property yielding 7% or less using a loan???