Kenya's REIT market faces calls to widen asset rules and cut the free-float threshold
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A lawyer at the AmCham Kenya 2026 Business Summit proposed widening the definition of eligible real estate to include telco towers and data centres, and lowering the 25% free-float requirement that sponsors must meet.
Kenya's real estate investment trust (REIT) market is facing calls to modernise its rulebook, with practitioners arguing that the definition of eligible real estate should widen beyond traditional buildings.
Speaking at the AmCham Kenya 2026 Business Summit, Peter Waiyaki, a partner at Mboya Wangong'u & Waiyaki Advocates, proposed changes that would widen the definition of eligible real estate, bring infrastructure assets such as telecommunications towers and data centres into consideration, and revisit the rules governing qualifying income.
The market has grown since the launch of ILAM Fahari I-REIT in October 2015, Kenya's first REIT instrument. It now includes income and development structures, alongside newer US-dollar-denominated instruments such as the ALP D-REIT, ALP I-REIT and TRIFIC Green USD I-REIT.
TRIFIC provides a recent example of that diversification. The TRIFIC Green USD I-REIT targeted approximately US$30 million through a public offer backed by the North Tower office development at the Two Rivers Special Economic Zone. The offer closed with about US$30.82 million raised against a US$29.83 million target, a 103.3% subscription; including the sponsor's contribution of the underlying property, the vehicle's total value was reported at nearly US$37.3 million.
Waiyaki argued that telco towers, fibre facilities and data centres combine land and buildings with specialised power, cooling and computing infrastructure and can generate recurring revenue, making them relevant to investors seeking predictable, long-duration income. He also called for a review of the lease requirements and the definition of income used to determine whether an instrument qualifies as a REIT.
Another proposal concerns Kenya's mandatory 25% free-float requirement. Waiyaki argued the threshold may be difficult to meet for a sizeable REIT in a market where public-investor depth remains limited, suggesting a free float of 10% or 5% could be more realistic for some large instruments. The proposals remain calls for reform rather than adopted changes; collective investment scheme assets reached about KSh948.7 billion by June 2026, while foreign-currency-denominated fund assets rose to KSh110.5 billion.