Property fund ILAM Fahari I-Reit plans to sell some of its assets to improve returns from its real estate portfolio.
Fahari currently owns four properties –a shopping centre, an office building and two semi-office or light industrial buildings valued at Sh3.25 billion. The sale of some of the assets is part of the proposed restructuring of the fund, details of which are yet to be disclosed. The fund’s annual general meeting has been delayed, awaiting the restructuring options which are before regulators.
“The Reit manager, with the approval of the trustee, will be disposing of non-core assets within the property portfolio. The process is subject to, inter alia, regulatory and unitholders’ approval,” Fahari said in a statement accompanying its half-year results.
The company owns Greenspan Mall, Bay Holdings (a semi-office and light industrial building), Highway House (an industrial building) and 67 Gitanga Place (an office building).
The mall is its most valuable asset at Sh2.2 billion, according to an assessment conducted in December last year. It is followed by 67 Gitanga Place (Sh841.4 million), Bay Holdings (Sh189.7 million) and Highway House (Sh24.7 million).
Fahari has been looking for ways to boost return on its assets, which has been held down by, among other factors, significant operating expenses. The fund, which is listed on the Nairobi Securities Exchange, more than doubled its net profit in the six months ended June to Sh86.1 million.
This was up from Sh42.2 million recorded in the same period last year.
The earnings jump was aided by an increase in revenue and the value of investment property. Fahari onboarded Naivas supermarket as the replacement anchor tenant at its Greenspan Mall, raising rental income 26 percent to Sh171.7 million in the review period.
Tuskys, which is in financial distress, was the previous anchor tenant at the property where it was evicted for defaulting on rent.