The Capital Markets Authority (CMA) is proposing changes to Kenya’s real estate investment trust (REIT) framework, including a Sh100,000 minimum subscription threshold, in a renewed effort to attract more investors and deepen the country’s property investment market.
The recommendations, outlined in a report published in November 2026, seek to address regulatory barriers that have limited participation in REITs since their introduction in Kenya in 2013. The regulator initially set a Sh5 million minimum investment to restrict participation to sophisticated investors familiar with the risks associated with the investment vehicles.
REITs allow investors to pool money to acquire, develop or manage income-generating properties. Investment REITs (I-REITs) generate returns through rental income from completed properties, while Development REITs (D-REITs) raise funds for construction and other property projects.
The CMA says lowering the entry threshold would make property investment more accessible to individuals who cannot commit millions of shillings. It described the proposed reduction as a progressive step towards democratising real estate investment and expanding participation in the capital markets.
The recommendations also include reducing the proportion of a REIT’s property that must be held by the public from 25 percent to 15 percent. The regulator argues that the current ownership requirements can force large investors, including pension funds and insurance companies, to sell portions of their holdings to meet public participation thresholds.
Another proposed change would standardise the fee for converting a Development REIT into an Investment REIT at Sh150,000, down from a previous cost that could reach Sh7.5 million. The CMA also wants REIT managers to be allowed to guarantee loans taken by their projects or associated special-purpose vehicles, potentially improving access to financing.
The proposed reforms come as interest in the investment vehicle shows signs of growth. Two REIT offers launched in 2026 recorded subscription rates above 100 percent, with ALP Investment REIT attracting 115 percent and Trific Green I-REIT recording 103.3 percent.
Kenya currently has three REITs trading on the Nairobi Securities Exchange, although two are denominated in US dollars, limiting accessibility for some local investors.
The recommendations are intended to strengthen the role of REITs in mobilising private capital for property development and the government's affordable housing agenda. Their implementation will depend on the required regulatory and legal amendments.
