Real estate investment trusts: an alternative source of funding for construction and development in Kenya

Abstract

This thesis underscores the fact that real estate investment trust (REIT) is a viable financing alternative for construction and development and highlights the need to make REITs an attractive investment product to boost its uptake in this country. The study looks at the accessibility of REITs and researches on what can be done to make REITs accessible to a larger pool of investors. One of the ways this can be done is by giving tax incentives such as reduced taxation to investors and developers to consider REITs as an investment tool. The study points out that the existing legal framework has various entry barriers and fails to offer sufficient incentives to the structure of REITs so as to make it attractive to investors. The study also looks at one unique type of REITs that is proposed to be introduced in Kenya and how it is fundamentally different from the historical REIT as it is known. The study concludes that the establishment of real estate investment trusts is a positive step towards increasing investment options as well as sources of harnessing funds for development, but more needs to be done to make it accessible and affordable as an investment product and thus increase its uptake in Kenya.