A Total Beginners Guide To Investing In Real Estate Investment Trust Schemes (REITs) in Kenya

reits in Kenya

Written by Agatha

December 15, 2021

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You need about Ksh 20 billion to buy the 50-acre Waterfront Mall in Karen. 

It will cost you another Ksh 1.35 billion to put up a project similar to the upcoming Meru Greenwood City being constructed by Fusion Capital. 

If you have been keen enough as you move around Nairobi, you may have seen the Qwetu brand of Purpose-Built Student Accommodation (PBSA) facilities.  Owning one of those e.g Qwetu Hurlingham or Qwetu Aberdare Heights will cost you not less than Ksh 1.5 billion.

These are eye-popping figures that you may not even want to think of as an individual investor, more so, a beginner. In the wisdom of many, this is a lane best reserved for deep-pocketed institutional investors who have all the monies to splash around. 

While that may be true, here is a much truer statement: with as little as under Kshs 1,000 bob, you can start owning slices of these investments. Yes, you heard it right. 

In this article, you will learn everything you need to know about investing in REITs in Kenya.


What You Need To Know:

✅ REITs (Real Estate Investment Trusts) are government-regulated investment vehicles where investors like you and I pool their funds to invest in real estate assets.

In exchange for the money you invest, you are allocated units from which you earn dividends and capital gains.

✅ The best REIT in Kenya to invest in right now is the Acorn I-REIT which is responsible for the Qwetu brand of Purpose-Built Student Accommodation (PBSA) facilities that you may have seen as you move around Nairobi.

✅ You need to create an account on the VUKA platform to start investing in the Acorn I-REIT.

Click here to create your account and start investing with as little as 1,000 Bob!


Using an investment vehicle called a REIT, you can own units (shares) in these humongous investments previously inaccessible to retail investors like you and I. To whet your appetite even further, you currently need just Ksh. 212.39 (circa. 4 loaves of 400g bread) to buy 10 units of ownership in the Qwetu portfolio of student residences and begin earning returns right away.

Here is the deal: if you stick with me to the end of this guide, you will learn everything you need to know about:

If you’re a visual learner, you can watch the series on our YouTube Channel:

What is a REIT?

REITs (Real Estate Investment Trusts) are regulated investment vehicles where investors like you and I pool their funds (just like we do while investing in Money Market Funds) to invest in real estate assets. In exchange for the money you invest, you are allocated units from which you earn dividends and capital gains. It is that simple!

Yes, you can invest in real estate without having to directly buy a house, plot, or put up rentals.

If you are the kind that prefers diagrams and pictograms, here’s the typical structure of REITs:

reits in Kenya

Credit: Traded Estate

Think of a REIT as an investment company that uses the money you deposit with them to build or buy real estate assets. These assets may appreciate in value (capital gains) or generate a regular income from which you get a return. 

For instance, if a REIT has 100,000 units and the REIT manager decides to distribute Ksh 50,000 as income in a given year, each unit you hold will earn you Ksh 0.5.


What are the different types of REITs in Kenya?


You may have already read about so many different types of REITs: 

  • Income REITs
  • Development REITs
  • Islamic REITs
  • Mortgage REITs 
  • Healthcare REITs etc

In Kenya, we currently have two types of REITs and chances are only one type will be useful to you as a beginner investor. These are:


1. Development REIT


Also called a D-REIT, this type of REIT originates, develops, stabilizes and exits real estate projects. 

Simply, they build and sell real estate assets and share the profits (capital gains) with the unit holders. 

Currently, the Acorn Student Accommodation Development REIT (Acorn D-REIT) is the only fish in these waters.

It is the Acorn D-REIT that is putting up the Qwetu and Qejani brands.


2. Income REIT


Also called the I-REIT, an Income REIT pools funds from investors to acquire completed and stabilized income-generating real estate assets.

The income from these assets less the management expenses is distributed at the end of the year or half-yearly (interim dividends) to unit holders are also known as Security holders. 

The two players in this field in Kenya are:

  • Acorn Student Accommodation Income REIT 
  • The ILAM FAHARI Income REIT formerly STANLIB FAHARI Income REIT. 

Stick around for more about these I-REITs.


3. Islamic REITs


This is a Shari’ah compliant REIT that invests in income-generating real estate projects. The REIT manager conducts a  Shari’ah compliance test that ensures non-permissible activities are not carried out on the premises.

We currently do not have an Islamic REIT in Kenya.


The structure of the REITs currently registered in Kenya


All REITs in Kenya are unincorporated Trusts registered at the Ministry of Lands and Physical Planning. 

As you would expect of any Trust, it must have a board of Trustees and management. 

Since the Trust is unincorporated, it is not a corporate body and as such cannot legally own any property in its name. This is where Trustees come in to own the property on behalf of the Trust and the investors. 

Below is a simplified chart of the structure of REITs:

reits in Kenya

Credit : MoneySense.gov.sg


In Kenya, REITs are regulated through a couple of laws including:


  • Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2013
  • The Capital Markets Act Chapter 485A

In addition, REITs must comply with the following requirements:

  • International Financial Reporting Standards (IFRS)
  • Accounting Standard IAS 34: Interim Reporting 
  • Nairobi Securities Exchange provisions

For instance, Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2013 require that at least 80% of the distributable income from REITs must be distributed to unit holders. 

The regulations also require that at least 75% of an I-REIT portfolio must be invested in income-producing real estate within two years after being authorized.

Here is a summary of the three REITs to give you a look and feel of how they are structured:

reits in Kenya

reits in Kenya

reits in Kenya

REITs just like companies can either be listed on a centralized exchange such as the Nairobi Securities Exchange (NSE) or an Over-The-Counter (“OTC”) trading facility.

In Kenya, we currently have one REIT that is listed on the NSE- the ILAM Fahari I-REIT.

The rest such as Acorn Student Accommodation I-REIT (“ASA I-REIT”) and Acorn Student Accommodation Development Real Estate Investment Trust (“Acorn D-REIT”) are traded via an OTC platform.

When REITs are listed on the Nairobi Securities Exchange, they are traded like stocks, and investors can buy and sell shares of the REITs through stockbrokers and investment banks.

Just like stocks, the price of a REIT unit is determined by and fluctuates based on the forces of demand and supply.

However, if you want to invest in Acorn Student Accomodation I-REIT, which is currently listed on the Unquoted Securities Platform (USP) of the NSE, you need to open an account with Vuka, a platform developed, managed, and operated by Acorn Investment Management Limited (AIML).

The real estate investments acquired are held on behalf of unit holders by a REIT Trustee. On the other hand, a REIT manager is tasked with the professional management of the REIT scheme. 

In Kenya, REITs are regulated by the CMA (Capital Markets Authority). The CMA is a government statutory agency that has regulations and provisions for companies that run such investments (those that involve collecting money from different people/investors). 

There are only 3 Authorized Real Estate Investment Trusts in Kenya: 

  • The ILAM Fahari I-REIT
  • Acorn Student Accommodation Development Real Estate Investment Trust (Acorn D-REIT)
  • Acorn Student Accommodation Income Real Estate Investment Trust (ASA I-REIT)


How do REITs work in Kenya?


There are several parties involved in the structure of REITs. This is purposely done to improve transparency, and accountability and ensure the interests of investors are fully protected. The parties are:


1. Capital Markets Authority (CMA)

This is an independent government agency that regulates financial markets in Kenya. It licenses, supervises, and monitors activities in the REITs market to ensure your investment is safe.


2. A Trustee

This could be a person or company licensed by CMA to oversee the management and compliance of a REIT. In short, trustees take legal ownership of the assets in Trust and ensure that the funds you contribute are invested in line with the objectives and purpose laid out in the Trust Deed.  They charge a fee for their services.

The Co-operative Bank of Kenya Ltd is the Trustee for ILAM FAHARI I-REIT, Acorn D-REIT, and ACORN I-REIT.

The trustee has several responsibilities such as:


A. Appointment and supervision of the REIT Manager.

B. Acquiring and holding properties on behalf of the investors.

C. Ensuring that the assets of the scheme are invested in accordance with the Trust Deed and the Offering Memorandum.

D. Ensuring that distribution of the profits from the assets of the REIT are made in accordance with the Offering Memorandum.

E. Assessing the feasibility of the investment proposals put forward by the REIT manager.


  • A Trust Deed 

This is a document that establishes or sets out the terms, objectives, and the Investment Policy of the REIT. All investments are done in line with the objectives in this document. 

Think of it as the constitution that guides the management of REITs. 

For instance, Acorn I-REIT and Acorn D-REIT were established under Trustee Deeds dated 16th December 2020 while ILAM FAHARI I-REIT was established by Trustee Deed dated 30 September 2015. 

From time to time, the Trust Deed may be amended, supplemented, or replaced.


  • The Offering Memorandum 

The Offering Memorandum is a document detailing among other things the number of units of the REIT that are on offer and the price per unit. 

Acorn D-REIT had 210,791,300 Units on offer while Acorn I-REIT had 215,422,400 Units on offer, both going for KES 20 per unit. 

ILAM Fahari I-REIT had 625,000,000 units at an Offer Price of KES 20 per unit.


3. The REIT Manager

The REIT manager is an entity appointed by The Trustee with the sole responsibility of setting up and managing the REIT’s investments.

They charge a management fee and performance fee for this service which is one of the main expenses the REIT incurs.

The REIT Manager, on behalf of the investors, acquires, manages, maintains, and disposes of REIT Assets. 

They are also responsible for appointing the property manager, service providers and maintaining accounting records. 

Currently, the REIT manager for Acorn D-REIT and Acorn I-REIT is Acorn Investment Management Limited while that of ILAM Fahari I-REIT is ICEA LION Asset Management Limited.


4. The Property Manager

This is a property management entity that enters into a contract with the REIT manager to provide Property Management services to the REIT. They are paid management fees from the REIT or directly by the tenants. 

Acorn Management Services Limited provides property management services to Acorn D-REIT and Acorn I-REIT while CBRE Excellerate offers property management services to ILAM-Fahari I-REIT.


5. Service providers 

These are providers of operational services to the REIT at a fee and are appointed by the trustee. They include:

  • Property managers
  • Property valuers
  • Structural engineers
  • Legal advisors
  • Tax advisors 
  • Auditors

REITs can either be Open-Ended or Closed-Ended Funds.

All the three REITs in Kenya are structured as closed-ended funds.

This means investors can either subscribe to the initial public offer (IPO) in the primary market or wait until the units start trading in the secondary market which could be an OTC or central securities exchange. The Trust is under no obligation to redeem units from Security Holders but can issue additional units as and when it sees fit. 

In an Open-ended REIT, the shares or units can be issued or redeemed at any time.

In a Close-ended REIT, the number of shares outstanding is fixed. The REIT aims to raise a fixed amount of money through a public offering and is usually sold over a limited period. In a close-ended REIT, there’s a limited number of unitholders and the price of the share/unit is determined by how much the investors are willing to pay.

In Kenya, we have one REIT traded on the Nairobi Securities Exchange (NSE): ILAM FAHARI I-REIT. The ILAM FAHARI I-REIT (Formerly known as STANLIB FAHARI I-REIT) started trading on the NSE in November 2015. It is traded just like any ordinary company, therefore giving investors an opportunity to earn through both dividend income, and capital gains.

We’ll explore more on how to get started plus everything you need to know about the ILAM FAHARI I-REIT later.

How do you invest/buy REITS in Kenya?

Investing in REITs in Kenya is super simple because all three are on the Nairobi Stock Exchange (NSE). 

HOWEVER, the ILAM FAHARI I-REIT is on the main exchange while the ACORN D-REIT and ACORN I-REIT are on a lesser-known section of the NSE known as the Unquoted Securities Platform (USP), an OTC (Over The Counter) kind of market. 


Now that you understand the general structure of REITs, below is the structure of the ILAM FAHARI I-REIT:


reits in Kenya


How to buy/invest in the ILAM FAHARI, I-REIT


Buying the ILAM FAHARI, I-REIT is simple as all you need is a CDSC account (this is the same account that you use to buy ordinary shares of other companies)

Your CDSC account is an electronic account that stores all the shares from the different companies that you own.

In case you don’t already have one, I recommend that you set up one with a licensed stockbroker.

I use and recommend AIB-AXYS AFRICA who can facilitate you to open a CDSC account and begin trading right away. You can open an account with them online in less than 2 minutes!

The minimum number of units of the ILAM FAHARI I-REIT you can buy is 100.

Below is a sample purchase order:

reits in Kenya

The ILAM FAHARI I-REIT Share price

The ILAM FAHARI I-REIT is the only REIT traded at Nairobi Securities Exchange (NSE) in Kenya. The share currently trades at KES 7 as of the time of publishing this article (Dec 2021). It invests 75% in real estate and 25% in cash and near-cash investments.

reits in Kenya

Just like other stocks, you need to buy a minimum of 100 FAHARI I-REIT shares. With as little as KES 700 (7*100), you can get 100 shares of the ILAM FAHARI I-REIT. 

Put in another way, 700 bob gives you an interest in 4 companies:

  1. Greenspan Mall Limited
  2. Bay Holdings Limited
  3. Signature International Limited
  4. Starling Park Properties LLC

Who said investing in real estate is reserved for the ultra-wealthy? Set up your account with AIB-AXYS AFRICA today and begin owning units of the ILAM REIT.


Is The ILAM FAHARI I-REIT a good investment?


reits in Kenya

Since listing on the NSE IN 2016, The REIT has since shed almost 65% of its value and the price has been oscillating between KES. 6 and KES. 7 since mid-2020. The reason for this is largely due to the foreign nature of the REIT concept in Kenya. Demand for REITs is not as vibrant as the demand for shares in Kenya. However, REITs are still an excellent investment due to the capital gain and dividend streams.

For a REIT that trades on the stock market, we recognize that the share price is determined by market forces. That is why we always choose to focus on the fundamentals and ignore the scorecard.



Download the ILAM FAHARI I-REIT 2021 report here 


How to buy the ACORN I-REIT and ACORN D-REIT

Both ACORN D-REIT and ACORN I-REIT are listed on the USP. This means you cannot buy and sell their units like the ILAM FAHARI I-REIT. In fact, ACORN D-REIT is only available to institutional investors and the minimum you can invest is Ksh 5 million.

To invest in this D-REIT, you’ll have to contact the following USP market participating agents:

  • Sterling Capital Limited
  • Kestrel Capital Limited
  • Faida Investment Bank
  • Standard Investment Bank
  • Waanzilishi Capital Limited
  • Liaison Financial Services Group Limited

The ACORN I-REIT which should be your focus here was initially targeted at professional investors. 

However, lady luck smiled on retail investors and Acorn Investment Management Limited (AIML) developed a platform known as VUKA. Through the VUKA platform, you can Sign Up for an account and invest in the ACORN I-REIT units. 

Below is a screenshot of a section of the trading window:

reits in Kenya

Something else you need to know about VUKA is that currently, it is in the CMA regulatory Sandbox meaning it is a technology still being tested before it is rolled out for mass usage. 

However, it’s still a regulated investment and you should consider creating an account and start investing

Here is a snapshot of the different categories of VUKA memberships. The lowest investment plan (Silver package) will cost you KES 998 top join (KES 499 -Joining fee and KES 499- Annual fee). 

reits in Kenya

Join VUKA and start investing today 🤑!


Frequently Asked Questions about REITs in Kenya

1. How to determine the value of REIT shares

When REIT units are issued for the very first time (primary market issue) the promoter determines the offer price. Thereafter, the price/value of the unit is determined in the secondary market by the forces of demand and supply.


2. How to withdraw my money from REITs

For units that are traded on a centralized exchange such as the Nairobi Securities Exchange, investors can sell their units through their brokerage (CDSC) accounts. For units traded on the Over The Counter, investors can sell their units through the USP participating agents. Investors in the Acorn I-REIT can sell their units through the VUKA platform.


3. How much do you need to invest in REITs in Kenya?

The minimum number of units you can buy in ILAM Fahari I-REIT is 100 units. In a typical transaction through a broker, you’ll only need a minimum of KES 636.76 to execute this trade.

For the Acorn I-REIT, the minimum you can buy through the VUKA platform is 10 units. You only need KES 212.39 to become a unit holder. 

Number of units =10

Single unit value* =20.62 (this changes based on valuation)

Total unit value=206.20

Service charge* = 3% of 206.20 =6.186

Purchased amount =219.39

*The unit value changes over time

*The service charge is only applicable during trading.

NB: The maximum number of units you can buy in a single through the Vuka platform is 100,000 and the trades are executed at the end of the month. So, assume you purchase units on Thursday, December 9, 2021, your trade will be executed on Friday, December 31,2021.

4. Which are the best REITs in Kenya?

There are 3 authorized Real Estates Investment Trusts in Kenya:

ILAM FAHARI I-REIT is the oldest with a track record of regular distributions to investors as follows:

reits in Kenya

The net asset value per unit as of 31st December 200 was KES 20.86.

For the Acorn I-REIT, which was launched on February 8, 2021, here is the 5-month interim distribution:

reits in Kenya

Acorn D-REIT had not old sold any unit as of June 30, 2021, hence no capital gains and subsequent distributions

5. Are REITs a good investment in Kenya?

Looking at the distributions per unit, market price per unit, Net Asset Value per unit, and the general direction of the real estate market, REITs compared to equities are an attractive investment. 


6. Are REITs in Kenya high risk?

REITs derive their risk from the underlying assets and industry nuances. Looking at the real estate industry and the properties REITs invest in, there is a huge potential for growth with minimal risk, especially in the long term. 

Click here to read for an in-depth article on the advantages and risks of investing in REITs in Kenya.

reits in Kenya

Was this article useful? If yes, mind leaving us a tip using this link to keep this blog alive?  You can pay what you believe this article is worth to you and your financial freedom journey…it could be 10 shillings, could be 500 – you decide. 

Do you have other questions about REITs? Leave your questions in the comment section. I read and answer ALL.

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  1. Njung'e Thairu

    Very informative, thank you for demystyfing this subject.

      • Joshua Katamu

        Wow the information is rich … Just found my new way to financial literacy

        • Agatha

          Welcome to The Wealth Tribe!

        • mary ngugi

          Very informative, I’m interested in it

          • Agatha

            I have sent you an email with the joining instructions

        • Marvin Ngari

          Wow this amazing looking forward about this

          • Agatha


  2. Erick Mwalugha

    Wow, I didn’t realize there existed a whole new world of investment. I will take notes and read between the lines. I am grateful for every morsel I gather here.


        Hello @Agatha, I used the link from you youtube channel to signup for vuka. I paid Ksh. 998, but I have not gotten any response. I can not sign in ? Please help me. Thank you.

        • Agatha

          Hi Anthony, use portal.vuka.co.ke to login. You can also call customer service via 0800730333. They will help

  3. mary ngugi

    I’m interested in it


    This is a great content. I actually do not like reading articles but this captured my eyes. Great work. This as been very helpful and has offered me some insight to me as a student. I would like to start investment as early as possible even if I am students. How can I get into contact with you Agatha?

    • Agatha

      Hi Anthony, I will send you an email

  5. mercy wacuka

    This article was very informative,now i know where to start.

    • Agatha

      I’m glad it was helpful!

  6. florence

    Dear Agatha,
    The message its informative and i would like to join kindly assist.

    • Agatha

      Alright. I’ll send you an email

  7. Winnie

    Can I invest in this even now?

  8. Bob Murimi

    Thank you for this amazing insight into REITs. With this information, we get the power to break the barriers of financial freedom. REITs might be a fairly new field of play but it is surely worth it.

    • Agatha

      What an insightful comment!


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