Cytonn Investments has filed an application with the Capital Markets Authority (CMA) to register a Development Real Estate Investment Trust (DREIT) seeking to raise Ksh2 billion of capital.
In a statement to newsrooms, the company said the DREIT, which is structured to pay a coupon over the life of the development, will be deployed for the first phases of two real estate projects, the Ridge in Ridgeways, and RiverRun Estates in Ruiru.
“This capital raise is envisioned to help Cytonn diversify funding sources for their real estate development pipeline, which has a project value of over Ksh82 billion,” said the company.
Cytonn has traditionally relied on private sector funding, which while easier to access, has been more expensive. This has thus necessitated the development of alternative sources of funding, allowing development of institutional-grade real estate at a relatively lower cost.
“Following the acquisition of financing for bank debt for The Alma from SBM Bank, Cytonn is now pursuing regulated DREIT funding,” added the statement.
The Ridge is a comprehensive lifestyle development on 10 acres in Ridgeways where stage one of the development is complete – including land acquisition, concept, foundation and is 50 percent presold.
On the other hand, RiverRun is a mixed used community on 100 acres in Ruiru, with a dedicated affordable housing component.