A guide on the management of investments in real estate industry at the bourse is in the offing once the Ministry of Finance approves and gazettes recommendations from the capital markets regulator.
The Capital Markets Authority (CMA) has revised a framework which will oversee financing in the property markets through Real Estate Investment Trusts (REITs).
REITs are regulated pool of funds that are drawn from investors and put under the management of an appointed fund manager who then decides on the kind of real estate investment to go for based on the amount raised.
The acting CMA Chief Executive Paul Muthaura said that the authority has sought services of International Securities Consultancy to refine the policy and re-draft the regulatory framework to suit the Kenyan industry.
?In order to ensure that the ultimate regulatory framework for introduction of REITs to meet diverse needs of the market from both a public policy and commercial viability perspective, CMA has held several consultative meetings with key stakeholders since last year,? he said.
He was speaking during a workshop on REITs held at a hotel in Nairobi yesterday that brought together professionals in the property field to discuss the proposed policy and compare experiences on the topic.
Mr Muthaura said that the investment scheme will enable any interested income-generating consumer to get a property which will be listed in the Nairobi Securities Exchange and own shares trading in the bourse.
Part of the recommendation seeks to include Islamic REITs which should be open to investors who want to comply with the shariah law. The scheme is part of the government?s plan towards leveraging funds for property development and investment.
At the moment, there are no formal frameworks for efficient financing of large real estate developments apart from mortgage financing.?Currently, one has to be heavily financed in order to tap into the real estate market.
Source: http://www.nation.co.ke/business/news/-/1006/1460800/-/3eddiqz/-/index.html
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