Global law firm Norton Rose Fulbright has advised InfraCo Africa, part of the Private Infrastructure Development Group, in connection with two of the first real estate investment trusts (REITs) to be established in Kenya since its REIT regime was introduced in 2013.
InfraCo Africa, which is funded by the UK, Dutch and Swiss governments, seeks to alleviate poverty by mobilising investment into sub-Saharan infrastructure projects. It acted as the anchor investor for both REITs, established by Acorn Holdings Limited, a Kenyan organization with a track record in delivering purpose-built student housing. The first REIT is a development REIT aimed at developing affordable student housing in Nairobi, while the second is an investment REIT focused on holding investment-grade, stabilized assets.
Unlike traditional equity, REITs offer a tax-efficient means of raising capital. InfraCo Africa’s participation as an anchor investor is expected to help mobilise local capital markets and enable Acorn to achieve scale quickly.
The London-based Norton Rose Fulbright team was led by partner Mark Lloyd Williams and senior associate Andrew Davies, in conjunction with Kenyan colleagues from alliance firm Walker Kontos in Nairobi.
Mark Lloyd Williams commented:
“We are proud to have assisted InfraCo Africa on its investment in these two groundbreaking Kenyan REITs, under what is the most developed Africa REIT regime. Together with InfraCo Africa, we were able to use our extensive experience of listed international real estate vehicles and REITs to assist the sponsors in developing vehicles which will demonstrate the effectiveness of the REIT structure for collective investment in African real estate.”
Alex Traube-Childs, InfraCo Africa’s General Counsel & Head of Compliance commented:
“Norton Rose Fulbright’s deep knowledge of REITs was invaluable to InfraCo Africa in shaping our role as anchor investor in this landmark transaction. With Norton Rose Fulbright’s assistance, we have made our first investment in affordable housing, facilitating access to higher education and creating a replicable investment model to attract new private investment to the sector.”
Development of student accommodation is a key part of Kenya’s plans for future economic development as student numbers grow and accommodation is in short supply. Subject to funds raised, the Acorn project will deliver 11 purpose-built housing blocks in Nairobi, providing 8,800 additional student beds over the next five years.