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Property fund Fahari doubles dividend on higher rent income
Income real estate funds such as Fahari are required to distribute at least 80 percent of their net profit from the rental business as part of the conditions to exempt them from the 30 percent income tax.
Property fund ILAM Fahari I-Reit has more than doubled the payout to investors to Sh0.65 per unit (share) or a total of Sh117.6 million despite its net profit falling by 34.8 percent in the year ended December 2025.
The fund had made a distribution of Sh0.30 per unit for the prior year. The new distribution will be made on April 30 once approved at the annual general meeting on April 22.
Fahari’s net income declined to Sh245.7 million in the review period from Sh377.2 million a year earlier as lower gains from property revaluations weighed down growth in rental income and lower operating expenses.
The property value gain dropped to Sh100 million from Sh263.5 million.
“The [profit] decline was on account of lower fair value gain on investment property recorded in the current year. Distributable income, however, increased by 135 percent to Sh145.8 million from Sh62.1 million in the prior year,” said Fahari in a statement.
Income real estate funds such as Fahari are required to distribute at least 80 percent of their net profit from the rental business as part of the conditions to exempt them from the 30 percent income tax.
Fahari’s rental income increased to Sh304.3 million from Sh279.4 million, largely due to increased occupancy at Nairobi’s Greenspan Mall, which is its key asset.
The fund’s property expenses decreased by three percent to Sh107.4 million, which it attributed to a reduction in consultancy fees. Fahari’s operating expenses also fell by nine percent to Sh100.1 million due to the restructuring costs incurred in the prior year, the firm said.
Fahari was delisted in February 2024 from the Main Investment Market of the Nairobi Securities Exchange (NSE), where it was trading below its net asset value, due to the presence of unsophisticated retail investors.
Most of the retail investors were bought out by the fund manager, ICEA Lion Asset Management, for Sh11 per unit ahead of the delisting.
The fund now trades on the NSE’s Unquoted Securities Platform, where transactions start from a minimum of Sh5 million. The fund manager had said Fahari could not scale its operations, including raising additional capital to deepen the property portfolio, with the presence of small investors.
