A month after Fusion Capital received approval from Kenya’s Capital Markets Authority to launch their D-REITs (Development Real Estate Investment Trust), the Nairobi Stock Exchange is set to list its 2nd REIT.  The nod from the regulator allows it to facilitate the issue and eventual listing of a commercial D-REIT with a minimum value of Sh1.15 billion ($11.4 million) and an upper threshold of Sh2.3 billion ($22.7 million). The minimum investment into the D-REIT is Sh 5,000,000 ($49,425). Currently, the new REIT has 3 investors and needs 4 more to meet requirements of the Capital Markets Authority.

The cash raised will be put towards developing a landmark property called Greenwood City located in Meru County which is closer to the centre of Kenya. This follows the trend of developers seeking growth outside the core cities and major sub-Saharan capitals.

Greenwood City is a Sh3.7 billion mixed use development that will comprise a shopping mall, an upscale office block and executive apartments. Construction started in September 2015 and 15% is already done. The project is to be developed and sold within 36 months at a yield to investors.

According to an economic survey cited by Fusion Capital, growth in the Kenyan real estate and property sector is set to continue, driven by demand for new office space and urban housing. The survey noted that high demand for fixed assets, largely property, was a major contributor to a 5.3 per cent expansion in the Kenyan economy in 2014.

Speaking on the development, Luke Kinoti, Group Chief Executive at Fusion Capital said:

“Besides being the commercial hub of an agriculturally productive catchment, with a cash rich economy, Meru is currently under-served with similar developments. Greenwood City was conceptualized to meet this need and provide first-class shopping and executive residential accommodation for a growing and vibrant middle class and grade A office space for firms doing business in the region…”

On CNBC Africa, he went on to explain that an anchor tenant for the mall had been secured and 30% of the residential apartments were already sold off-plan, which demonstrated the demand for the project. Kinoti added that Fusion Capital is targeting an internal rate of return of 20-25%.