Centum plans Kenya’s first dollar-denominated REIT worth $37M, boosting foreign investor confidence and deepening the country’s real estate market.

Kenya’s Centum Unit to Launch Country’s First Dollar-Denominated REIT

Kenya’s capital markets are on the brink of a historic milestone as Centum Investment Company Plc prepares to introduce the country’s first dollar-denominated real estate investment trust (REIT). The move underscores a growing appetite among international investors for Kenyan real estate and signals the country’s gradual transition toward globally aligned capital-market products.

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A Landmark Move by Centum

According to Bloomberg News, Centum’s subsidiary — Two Rivers International Finance & Innovation Centre (Trific) — plans to issue a US $37 million REIT denominated in US dollars before the end of 2025.

The product will be the first of its kind in Kenya, marking a new phase of diversification within the Nairobi capital market. Centum’s Group Chief Executive James Mworia said the dollar-priced REIT aims to attract both local and international investors seeking predictable returns and protection from local-currency depreciation.

The instrument is expected to deliver an 8 percent annual return and will require a minimum investment of US $1,000, making it accessible to a wide range of investors.

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Why This REIT Matters for Kenya

The launch of a dollar-priced REIT is more than a financial innovation — it’s a statement about Kenya’s evolving capital market. For years, Kenya’s real estate and investment sectors have been dominated by shilling-denominated instruments, which often deter foreign investors due to currency-exchange risk.

By pricing in US dollars, Centum’s REIT offers a hedge against shilling depreciation and provides an opportunity for investors to earn stable, foreign-currency returns from local assets. This could help deepen investor confidence, enhance market liquidity, and broaden the pool of foreign capital flowing into Kenya.

The initiative also aligns with the Capital Markets Authority (CMA) reforms that aim to expand alternative investment products, such as REITs, to support Kenya’s Vision 2030 development goals.

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Key Features of Centum’s Dollar-REIT

Feature	Details
REIT Size	Approximately US $37 million
Minimum Subscription	US $1,000
Expected Annual Return	8 percent
Asset Base	Fully leased, USD-generating property under Trific
Regulatory Status	Awaiting approval from the Capital Markets Authority
Planned Launch	Before end of 2025

The REIT will acquire a fully leased, revenue-generating commercial property located within Two Rivers Development — one of East Africa’s largest mixed-use projects, owned by Centum.

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Market and Regulatory Implications

The launch of this REIT represents a breakthrough for Kenya’s capital-market innovation. However, it must first secure regulatory approval from the CMA, which has historically exercised caution in licensing new investment products to protect investors.

Experts believe this product could open the door for other foreign-currency-denominated instruments, helping diversify the Nairobi Securities Exchange (NSE) portfolio. In the long term, it could position Kenya as a preferred investment hub for East African property funds.

Still, challenges remain. Market analysts warn that property-valuation transparency, tenant creditworthiness, and macroeconomic headwinds — including inflation and high interest rates — could influence performance. Nevertheless, the REIT’s USD pricing significantly cushions investors from local-currency volatility.

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Broader Economic Context

Kenya’s property market continues to attract institutional capital, thanks to rapid urbanization and rising demand for Grade-A commercial space. The country’s infrastructure development under projects such as Vision 2030’s Big Four Agenda and Nairobi’s affordable housing program has further boosted investor confidence.

According to data from Knight Frank Kenya, Nairobi remains one of Africa’s top destinations for high-yield commercial properties, with rental yields averaging 8 – 10 percent in prime zones. Centum’s dollar REIT is expected to capitalize on this demand while offering global investors an easy entry into Kenya’s real-estate market without direct currency exposure.

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What It Means for Investors

For foreign investors, this REIT provides a stable entry point into an emerging market with high potential for real-asset growth. By earning returns in US dollars, investors mitigate the impact of local-currency depreciation — a major concern for global portfolios in frontier markets.

For local investors, the product encourages a new savings and investment culture that bridges domestic and global financial systems. As Centum sets the precedent, other developers may follow suit, introducing hybrid and offshore-linked instruments.

This will likely enhance transparency, improve reporting standards, and attract more institutional investors — such as pension funds and insurance companies — into Kenya’s real-estate sector.

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A Step Toward Market Maturity

Kenya’s financial system has undergone steady reform since the 1990s, but REIT adoption has lagged due to low investor awareness and regulatory complexity. Centum’s initiative could shift perceptions by demonstrating how professionally managed, dollar-based instruments can deliver returns comparable to — or even surpassing — traditional real-estate projects.

As the Nairobi Securities Exchange seeks to boost listings and diversify revenue streams, such innovations could inject new vitality into Kenya’s investment landscape.

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Conclusion

Centum Investment Company’s plan to introduce Kenya’s first dollar-denominated REIT marks a defining moment for the country’s capital markets. It reflects both confidence in Kenya’s economic fundamentals and a strategic move to align with international investment trends.

Once approved and launched, this US $37 million REIT could attract global investors seeking stable, dollar-linked returns in Africa’s most dynamic property market. More importantly, it signals Kenya’s readiness to compete in the international investment arena — one dollar at a time.

Kenya’s PMI rises to 52.5 in October 2025, driving lending, deposits, and digital banking opportunities for banks.

Nairobi, Kenya – Kenya’s private sector grew at its fastest pace since December 2021. The Purchasing Managers’ Index (PMI) rose to 52.5 in October 2025, up from 51.9 in September, when the private sector rebounded.

A reading above 50 indicates expansion. October’s figure reflects stronger demand, increased production, and improved business confidence.

“Output growth across Kenya’s private sector accelerated to its fastest pace in nearly four years in October,” said analysts at Stanbic Bank Kenya.

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Banking Sector Implications

For banks, a stronger private sector can boost credit demand, deposit growth, and digital transactions.

Business Lending: Companies expanding production and inventory need working capital and loans. SMEs, which contribute over 30% of Kenya’s GDP, are expected to drive lending growth.

Trade Finance: Firms involved in import and export activity may increase demand for letters of credit, guarantees, and supply chain financing.

Deposits & Transactions: More business activity leads to higher deposits and transaction volumes, including digital payments and payroll processing.

Digital Banking: Kenya’s banks can expand online lending and payment solutions. Partnerships with fintech firms can help offer integrated digital services to SMEs.

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Broader Economic Context

Rising private-sector activity signals stronger employment, higher incomes, and increased government revenue. Policymakers see this as a positive sign for Kenya’s business environment.

Banks that align products with government policies and SME support programs can strengthen their market position.

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Risks & Opportunities

While growth is positive, banks should monitor credit quality, inflation, and operational risks. Innovative products tailored for SMEs, trade finance, and digital solutions will be crucial.

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Bottom Line

Kenya’s private sector, as reflected in the October 2025 PMI of 52.5, is expanding rapidly. Banks have a window of opportunity to capture lending, deposit, trade-finance, and digital banking growth.

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Kenya Revenue Authority retains the fringe benefit and deemed interest tax rate at 8% for Q4 2025, reinforcing stability for employers.

NAIROBI, Oct. 26, 2025 — The Kenya Revenue Authority (KRA) has maintained both the fringe benefit tax (FBT) market interest rate and the deemed interest rate at 8 percent for the final quarter of 2025. This decision, announced on October 21, underscores KRA’s commitment to providing predictability in tax administration amid recent monetary easing.

Employers must apply an 8% market interest rate when valuing fringe benefits such as staff loans and other non-cash perks. The 8% deemed interest rate also applies to employer or shareholder loans where no interest is charged. From these amounts, a 15% withholding tax must be deducted and paid to the Commissioner within five working days, according to Bloomberg Tax.

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Steady Policy Despite Rate Cuts

The 8% rate remains unchanged even after the Central Bank of Kenya (CBK) reduced the benchmark Central Bank Rate to 9.25% from 9.50% earlier this month. The move was intended to stimulate borrowing amid moderating inflation.

By keeping the FBT and deemed interest rates steady, KRA separates tax computation from short-term monetary fluctuations. This prioritizes predictability for employers and payroll systems. The Q4 rate covers October through December 2025 and serves as a reference for year-end tax planning.

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Employer and Payroll Implications

Fringe benefit tax applies when employers provide non-cash benefits like low-interest loans, housing, or vehicles. Under Section 12B of the Income Tax Act, employers must compute taxable value using a prescribed market rate. Section 16(2)(ja) imposes a deemed interest charge on interest-free or below-market loans from foreign affiliates or related parties.

“The 8% benchmark provides continuity for businesses closing their financial year,” said a Nairobi-based tax consultant advising multinational firms. “Predictable reference rates help employers comply and avoid last-minute recalculations.”

Some experts warn that a fixed rate may not always reflect market conditions. If lending costs fall below 8%, the FBT may overstate taxable values. Conversely, if commercial lending rises, the rate may understate employees’ benefit costs.

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The Legal Notice

KRA’s official notice states:

“For the purposes of Section 12B of the Income Tax Act, the Market Interest Rate is 8%. This rate shall apply for October, November, and December 2025. For the purposes of Section 16(2)(ja) of the Income Tax Act, the prescribed rate of interest is 8%. Withholding tax at 15% on the deemed interest shall be deducted and paid to the Commissioner within five working days.”

The language mirrors the previous quarter’s directive, showing KRA’s preference for consistent FBT and deemed interest rates.

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Market Reaction

Industry bodies have welcomed the move. The Institute of Certified Public Accountants of Kenya (ICPAK) said the stable tax reference improves predictability for financial reporting. “A consistent rate enables employers to make reliable projections on payroll and tax obligations,” the institute noted.

Analysts caution that future adjustments may be necessary if interest rates diverge significantly. For now, the 8% benchmark is seen as a prudent choice, offering stable compliance for employers and multinational subsidiaries through year-end.

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Compliance Checklist

Tax experts advise employers to:

• Update payroll and benefits systems to reflect the 8% rate for Q4 2025.
• Reassess employee loan portfolios to ensure correct FBT calculations.
• Remit withholding tax on deemed interest within five working days.
• Document compliance with KRA’s circular for audit readiness.
• Monitor new notices for Q1 2026 adjustments.

Maintaining the same rate for two consecutive quarters reduces mid-year recalculations and supports corporate financial stability.

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Fiscal Context

The decision aligns with Kenya’s broader effort to strengthen domestic revenue and maintain fiscal stability under the Medium-Term Revenue Strategy. It also complements reforms aimed at simplifying compliance and broadening the tax base without sudden shocks to the private sector.

As 2025 winds down, tax consistency is becoming a key feature of the government’s fiscal agenda. With borrowing costs stabilizing and inflation easing, Kenya’s 8% fringe benefit benchmark offers certainty to employers, investors, and auditors alike.