HomeMARKETSREAL ESTATEGreenspan Mall cinema pushes Stanlib Fahari I-Reit profit to Sh193 million

Greenspan Mall cinema pushes Stanlib Fahari I-Reit profit to Sh193 million

Stanlib Fahari I-REIT profit jumped 13% to Ksh193 million for the year ended December 31, 2018 driven largely by the addition of a cinema hall at its most prominent property, Greenspan Mall.

The cinema, which will be operational by May 2019, will be the first within a 25 kilometre radius of the mall.

Stanlib Fahari I-REIT Acting chief executive Nozipho Makhoba said: “The portfolio’s market valuation was bolstered by the addition of a modern 300 seat capacity, 3- screen cinema at Greenspan Mall which will be commissioned in the second quarter of 2019 underpinned by a 10 year lease.”

The cinema will be operated by Crimson Multimedia and Film Distributors.

Beyond the mall, a net revaluation gain on the REITS investment property also helped propel the profits.  Stanlib Fahari I-REIT also said that total portfolio return grew from 8.5% in 2017 to 8.8% last year.

The real estate investment trust, which is the sole REIT listed at the Nairobi Securities Exchange, said that the addition to its portfolio by the purchase of a three storey building in Lavington also contributed to income as rent began accruing from May of 2018.

However, the new property also brought with it additional expenses, seeing a further 13% year on year rise in property expenses to Ksh108.9 million. “Most of these expenses are funded out of the service charge income,” the fund said.

The listed fund also said that investment property now accounts for 90% of assets, with the balance of funds amounting to Ksh386.6 million arising from cash and securities. Its four properties — Greenspan Mall, Bay Holdings, Signature International and 67 Gitanga Road — are valued at Ksh3.4 billion, up from Ksh2.4 billion in 2017.

Makhoba also added that the firm’s strategy is to seek to partner with pension schemes as well as insurance companies in “asset for unit swap” deals.

Ruth Okal, Stanlib Fahari IREIT Asset Manager, said the partnership with pension schemes and insurance companies is as much a financial and regulatory consideration as it will offer partners the opportunity to meet their asset allocation as per legal recommendation.

“We are also offering them a platform whereby we are able to offer them professional management and experience as we are a fund that has been here and built capacity,” she said.

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