The promoter of Fahari real estate investment trust (I-Reit), ICEA Lion Asset Management, has raised its share of investments in commercial bank fixed deposits by deploying cash from the sale of a property in Nairobi's Industrial Area.
New disclosures from the manager of the property fund, which is listed on the Nairobi Securities Exchange's unquoted securities platform, shows the firm piled into term deposits, raising it to Sh411 million as of June 2025 from Sh46 million a year prior.
In August last year, ICEA Lion Asset Management (Ilam) reached a deal to sell Bay Holdings, a non-core asset for a consideration of Sh165 million, a slight premium to the property’s valuation of Sh160 million at the time.
“The sale of Bay Holdings was completed and the proceeds invested in competitive interest earning deposits awaiting deployment in line with the Reit regulations and investment policy statement,” Ilam said in new disclosures.
The Reit’s interest income increased by five percent on the investment of additional cash from the disposal of Bay Holdings, offsetting a decline in market interest rates during the first half of 2025.
Fixed and call deposit interest returns earned by the Reit declined from 16.5 percent in June 2024 to 11.2 percent in the same period this year.
The Reit’s statement of cash flows shows the entity received Sh159.6 million as proceeds from the sale of investment property at the end of last year. During the first six months of 2025, Ilam Fahari Reit increased its investments into term deposits by Sh52.9 million.
The Reit has now completed its sale of non-core assets in a strategic divestment after disposing of Signature Assets Limited in 2023.
Fahari I-Reit has two remaining properties including Donholm’s Greenspan Mall (a mixed-use development sitting on 9.5 acres and which was acquired in December 2015 at Sh2.09 billion.)
The Reit’s other property is Starling Park also known as 67 Gitanga Place and is a three-storey office building in Lavington, Nairobi.
The property acquired in May 2018 for Sh850 million has been vacant since the expiry of a lease in May 2023.
The Reit manager is looking for a replacement. Bay Holdings had been acquired in June 2016 at a cost of Sh216.1 million which marks a loss for the Reit after the discounting of the property at sale for a Sh165 million consideration.
Fahari I-Reit realised a 20 percent net profit for six months ended June to Sh64.3 million from Sh53.8 million a year earlier.
mainly due to higher rental income and reduced property expenses.
Greenspan Mall marked increased occupancy which reached 86 percent from 75 percent in June last year.
The manager of the property fund also increased asking rents to tenants in line with lease agreements. Property expenses fell by eight percent as electricity costs dropped on the installation of solar panels at Greenspan Mall.
