Real Estate Investment Trusts (REITs), may soon be the option of choice for developers wishing to raise finances for their real estate projects in Kenya.

“Njoroge Nganga, the Chief Executive Officer of Home Afrika said  their projects are long term in nature and require significant capital injection.   “REITs and bonds are turning out to be very effective platforms through which to access the significant funds available in the capital markets,” he said.

Kenya’s Capital Markets Authority (CMA) last year issued regulations – the Real Estate Investment Trusts (Collective Investment Schemes) Regulations 2013 – that will enable Kenyans opportunities to invest in income generating real estate developments in a manner akin to investing in stocks and will be traded at the stock market. The investments will be made through firms licensed to operate as REIT managers.

Home Afrika is planning to initially issue Development REITs (D-REITs) to enable it carry out property developments in its ongoing projects. The company will later create an Investment REITs (I-REITs) to create tradable instruments from the proceeds of the completed developments.

These include its flagship mixed development Migaa project in Kiambu (on the outskirts of Nairobi) that is scheduled for completion by 2016.

CMA has already granted several firms to operate as REIT managers, the most recent being Housing Finance and Cooperative Bank that were licensed in July. Home Afrika said it is in the process of applying to operate as a REIT manager even as it prepares to venture into the considerable middle income market.

The company’s share price has went up 56% in the course of August to trade at Ksh 5.15 (5 US cents) during a recent trading session. Home Afrika listed in July 2013 on the newly formed  Growth Enterprise Market Segment (GEMS) at a price of Ksh 12 per share.

This article first appeared on East African busiweek.com, to read the full the full article click here.