Real estate developer Fusion Capital has announced that cash raised from its D-REIT (Development Real Estate Investment Trust) will be used to develop a landmark property in Meru County.
Located in a prime address within Meru town on which constructions work has already started, the Ksh3.7 billion Greenwood City is a mixed use development that will comprise a shopping mall, an upscale office block and apartments. The project is to be developed and sold within 36 months at a yield to investors.
“Besides being the commercial hub of an agriculturally productive catchment, with a cash-rich economy, Meru is currently under-served with similar developments. Greenwood City was conceptualised to meet this need and provide first-class shopping and executive residential accommodation for a growing and vibrant middle class and grade A office space for firms doing business in the region,” said Mr Luke Kinoti, Group Chief Executive at Fusion Capital.
“This development is a game changer for Meru County, and provides a model approach for other counties we are targeting. Initial marketing had generated a promising uptake for the development.”
Last month, Fusion Capital received approval from the Capital Markets Authority to launch D-REITs into the Kenyan market. The nod from the regulator allows it to facilitate the issue and eventual listing on news units of a commercial D-REIT of a minimum value of Ksh1.15 billion and an upper threshold of Ksh2.3 billion.
The move by Fusion Capital Limited comes at a time when property as an asset class is receiving a lot of attention in Kenya with sustained talk of a boom. According to the latest Economic Survey, growth in real estate and property sector is set to continue, driven by demand for new office space and urban housing. The survey notes that high demand for fixed assets, largely property, was a major contributor to a 5.3 per cent expansion in the Kenyan economy in 2014.
Demand for high quality commercial and residential property continues to grow at one with the country’s economy and rising wealth. The real estate sector has further been bolstered by the devolved system of Government which has created investment and development opportunities in the counties.