ADVOKS GLOBAL · KENYA
The Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations
70. Real estate construction and development activities by an l-REIT
Edition: 2023-10-06 · In force
70. Real estate construction and development activities by an l-REIT
The trustee of an I-REIT may, on the recommendation of the REIT manager and subject to any limitations in its scheme documents and meeting the requirements of these Regulations, acquire a real estate under construction, vacant land for development or carry out construction on vacant land acquired for the purposes of development:Provided that:(a)the total acquisition value of all the land on which the construction is to be undertaken by the trust together with the cost of the construction on that land and the acquisition of real estate under construction at any time does not exceed fifteen percent of the total asset value;(b)the total value at acquisition, cost of vacant land held for development and construction by the I-REIT and the value of real estate which is not producing a commercial income at any time does not exceed ten percent of total asset value;(c)vacant land acquired for the purpose of development by the I-REIT shall only be held for a maximum period of three years at the conclusion of which it shall be developed and generate commercial income or sold;(d)income from other assets are sufficient to ensure that the earnings of the fund per unit during the construction or development period are not substantially diluted as shall be, determined by the Authority;(e)the contract for any acquisition of property under construction is subject to the completion of the building and for an agreed fixed price;(f)the REIT manager reasonably believes that the prospects for obtaining tenants for any property being constructed or developed at a commercial rent are good; and(g)development contracts are carried out on the best available terms and at arm's length transactions.