Kenya’s real estate investment trusts grew combined net operating income by 28.4% to Kshs 2.48 billion in FY2025, up from Kshs 1.93 billion the previous year, according to data from Cytonn Research.
Acorn D-REIT drove the majority of that growth, recording a 49.1% rise in net operating income to Kshs 1.72 billion. ILAM Fahari I-REIT grew net operating income 28.3% to Kshs 145.8 million. Acorn I-REIT moved in the opposite direction, falling 7.7% to Kshs 611.8 million, as a 4.6% drop in operating income outpaced a marginal reduction in costs.
Combined net asset value across all three REITs rose 12.6% to Kshs 21.4 billion.
Dividends paid, but compliance gaps persist
ILAM Fahari I-REIT distributed Kshs 117.6 million to investors in FY2025, equivalent to Kshs 0.65 per unit, up from Kshs 0.30 per unit in FY2024. Acorn I-REIT distributed Kshs 208.5 million, or Kshs 0.57 per unit. Acorn D-REIT paid no dividend for the year.
Kenya’s REIT regulations require managers to distribute at least 80% of net profit after tax. Only ILAM Fahari I-REIT met that threshold, posting a payout ratio of 80.7%. Acorn I-REIT paid out 34.1%.
Alok Sharma
Debt down across the board
Acorn D-REIT cut borrowings by 18.6% to Kshs 3.5 billion, reducing its debt-to-equity ratio by 17.5 percentage points and bringing its debt-to-EBITDA multiple from 3.7x to 2.1x. Acorn I-REIT took on Kshs 14.5 million in long-term borrowings, its first since inception. ILAM Fahari carried no debt throughout the year.
Tax incentives lapsed in 2022
At a three-day conference organised by the REITs Association of Kenya, industry participants pointed to the lapse of stamp duty exemptions and other transaction tax relief in 2022 as a drag on deal flow. The association has called for the reinstatement of those exemptions, arguing that removing the 4% stamp duty levy on property transfers within REIT structures would reduce entry costs and improve the economics of listing.
Registered REITs in Kenya qualify for corporate income tax exemptions on qualifying property income, and property transfers into REIT structures can attract VAT relief. Participants said those provisions alone fall short of what is needed to drive activity.
Market remains concentrated in South Africa
Africa’s REIT market carries a total capitalisation of approximately US$30 billion, with South Africa accounting for roughly 95% of that figure. Kenya’s market stands at US$189.5 million.
Five REITs have received Capital Markets Authority approval since the regulatory framework launched in 2013. None trade on the main investment market segment of the Nairobi Securities Exchange. ILAM Fahari I-REIT and ALP Industrial I-REIT operate on a restricted market sub-segment. Acorn I-REIT, Acorn D-REIT, and ILAM Fahari I-REIT trade on the Unquoted Securities Platform. Africa Logistics Properties listed its I-REIT in March 2026.
Reforms on the table
The Cytonn Research 2025 REIT report identifies the minimum capital requirement for REIT trustees, currently set at Kshs 100 million, as a barrier that limits trusteeship to large banks. The report recommends reducing that threshold to Kshs 10 million. It also recommends cutting the minimum investment requirement for restricted I-REITs from Kshs 5 million to Kshs 50,000.
Centum Real Estate is expected to launch a dollar-denominated I-REIT in 2026, a move the report says could draw foreign capital and encourage further product development in the market.
Average rental returns across the three REITs came in at 7.9% for FY2025, according to Cytonn Research.
