ILAM Fahari I-REIT Records Kshs. 148M in Full Year Profit

Nairobi, 23rd March 2021


ILAM Fahari I-REIT Records Kshs. 148M in Full Year Profit

Performance impacted by the pandemic as fund moves to make provision through material valuation ILAM Fahari I-REIT recorded Kshs 148 million in profit after tax for the year ended 31st December 2020 compared to Kshs 175.2 Million in 2019, marking a 16% decline from the previous year. The performance translates to distributable earnings of 74 cents per unit to Unit Holders, compared to 80 cents per unit in December 2019. The decrease was mainly attributable to reduction in fair value gain on revaluation of investment property compared to the previous year, against the backdrop of the Covid-19 pandemic whose impact is a material valuation uncertainty in the short to medium term. This led to three assets returning a capital depreciation as at 31st December 2020.









Key Financial highlights for the 12-month period ended 31 December 2020




 % Change

Net profit for the year (KShs)




Rental and related income (KShs)




Interest Income




Property expenses




Fund operating expenses




Fair value adjustment




Distributable earnings (KShs)




Market value of property portfolio (KShs)




Net asset value per unit (KShs)




Distribution per unit (KShs)




Portfolio vacancy rate





Distributable earnings declined by 7% to KShs. 134.4 million compared to KShs. 144 million in the comparative period because of the significant increase in property expenses emanating from the provision for bad debts. Rental income decreased slightly by 1% due to rental rebates offered to tenants at Greenspan Mall Limited and Bay Holdings Limited. This was however, offset by the lease escalations at Starling Park Properties LLP as well as Greenspan Mall Limited hence the minimal impact of the rebates on the portfolio performance.

Property expenses
 grew by 14% mainly due to the provision for bad debts as explained above. The financial difficulties experienced by the anchor tenant at Greenspan Mall Limited as well asCOVID-19 pandemic hampered rental collections hence the significant increase in bad debts.    


ILAM Fahari I-REIT’s CEO Commentary – Mr. Einstein Kihanda

Having taken over the management of the REIT at an unprecedented time – on 18th May 2020 – we are pleased with the resilience of the ILAM Fahari I-REIT’s earnings for the year ended 31st December 2020. The real estate market was hard hit by the COVID-19 pandemic with most tenants, especially in the retail sector facing the biggest challenges. The year 2020 was particularly challenging for ILAM Fahari I-REIT, due to the financial difficulties experienced by the anchor tenant at Greenspan Mall. The resultant closure affected business for the other tenants as a result of reduced foot traffic. We expect that 2021 will be a better year after the replacement of the anchor tenant at the mall.” 

“The fund manager, ICEA LION Asset Management, graciously discounted management fees to support the REIT during this tough season. The temporary reduction in fund management cost fostered the fund’s efforts to keep costs under control in order to maximize returns. Even though trading conditions continue to be tough with the retail market in Kenya still predominantly a tenant’s market, our portfolio has shown great resilience. Leases are being renewed at reasonable rates and the portfolio vacancy now stands at 13.2%.”

On the 
regulatory front, we are extremely pleased that the Finance Act 23 of 2019, which included the long-awaited exemption of REIT investee companies from income tax, is finally being operationalized. The conclusion of this process through the publication of a subsidiary tax legislation will remove the uncertainty around the tax exemption status of REITs. This will be a major boost not only to ILAM Fahari I-REIT but also for the REIT industry as a whole.


Looking ahead, we will be implementing a sound leasing strategy, manage debtors; move to  reduce vacancies through aggressively marketing available spaces and take measures to reduce cost. We believe that these initiatives will cement the place of the ILAM Fahari I-REIT and improve returns for the Unit Holders


In light of the challenges experienced, the Board recommended, and the REIT Trustee approved a distribution slightly lower than the prior year. A first and final distribution of Kshs 0.60 per unit will thus be paid by no later than 30 April 2021. This amounts to a payout ratio 81%.



For more information, please contact:


Einstein Kihanda

Chief Executive Officer:


REIT Manager


Paul Sagati

Group Assistant Manager

Marketing & Communications


+ 254 724 971 345

Nkatha Gitonga

Group Manager

Marketing & Communications


+ 254 722 844 304



The ILAM Fahari I-REIT is the First and only listed real estate investment trust in East Africa.  ILAM Fahari I-REIT was established in  September 2015   and became listed on the Nairobi Securities Exchange on 26 November 2015 On 18th May 2020, ICEA LION Asset Management took over the Management of the REIT from Stanlib renaming it ILAM Fahari I-REIT


The REIT Scheme is a closed ended Scheme and trades as “FAHR” on the Nairobi Securities Exchange (“NSE”).

The principal activities of the REIT include but are not limited to: 

  • The acquisition, for long-term investment, of income-generating eligible real estate and eligible investments, but not limited to housing, commercial and other real estate;
  • Undertaking of such development and construction activities as may be permitted by the Capital Markets Act, Chapter 485A of the Laws of Kenya and the REITs Regulations; and 
  • Investing in cash, deposits, bonds, securities and money market instruments




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