FIRST SCHEDULE
CONTENTS OF TRUST DEED
In addition to the requirements of the Act and these Regulations, a trust deed shall include a list of definitions or glossary of terms, a table of contents and contain the following information—1.ESTABLISHMENT OF THE TRUST AND VESTING OF PROPERTY(a)The trust deed shall be expressly stated to be binding on the promoter, any trustee, any REIT manager and all REIT securities holders and investors in REIT Securities and any party to the real estate investment trust and any scheme to which it relates that is authorized by the Authority as if each such party had been a party to the trust deed.(b)The trust deed shall be subject to the provisions of the Act and the Regulations and specifically state that, to the extent that provisions of the trust deed conflict with those of the Act or the Regulations, then the provisions of the Act or Regulations shall prevail.(c)The trust deed shall provide for—(i)the creation of the trust;(ii)the name of the trust;(iii)the duration of the trust (subject to the law on perpetuities);(iv)a declaration of trust and or initial vesting of assets in the trustee by the promoter as settlor of the trust to constitute the fund to be held on trust for the beneficiaries;(v)the terms of the trust;(vi)a statement that the REIT has been authorized by the Authority;(vii)particulars of the type of trust; and(viii)the trust deed and any other scheme documents to be governed by the laws of Kenya.2.APPOINTMENT OF TRUSTEE AND DUTY OF TRUSTEEThe trust deed shall include—(a)an agreement by the trustee upon establishment of the trust to act as trustee of the real estate investment trust subject to the terms of the deed, the Act and these Regulations;(b)a clear and unqualified statement of the trustee's fiduciary role and obligations to the REIT securities holders of REIT securities as beneficiaries of the trust and its discretions; and(c)an acknowledgement by the trustee that it is bound by the terms of the trust deed, the Act and the Regulations.3.REQUIREMENT FOR SEGREGATION OF ASSETS AND ACKNOWLEDGEMENT THAT THE TRUSTEE HAS NO CLAIM ON THE ASSETSThe trust deed shall include an acknowledgement by the trustee of its fiduciary obligations—(a)to hold the assets of the trust in a manner which ensure that these are segregated from the assets of the trustee and from the assets of any other trusts administered by the trustee;(b)to clearly identify those assets which are held on trust for the REIT securities holders as beneficiaries of the real estate investment trust;(c)not to charge or pledge or deal with any asset of the trust except in a manner authorized by the trust deed, the Act and the Regulations; and(d)to ensure that the accounts of the trustee do not include any assets of the trust.4.THE REIT SECURITIES HOLDERS OF REIT SECURITIES AS BENEFICIARIESThe trust deed shall provide for the trust to be constituted as a REIT securities trust and provide for—(a)the beneficial interest in the trust to be divided into units called REIT securities;(b)the classes of REIT securities and the rights attaching to each class;(c)subject to any rights, obligations or restrictions attaching to any particular REIT securities that each of the REIT securities confer a right to an equal undivided interest or share in the assets of the trust as a whole, subject to liabilities, and does not confer an interest in a particular asset;(d)the limiting of the issue or offer of REIT securities to persons other than the trustee or parties connected with the promoter:(i)until the trust has been authorized as a real estate investment trust scheme, and(ii)pursuant to the issue of a prospectus or offering memorandum.(e)the trustee to issue REIT securities and to register REIT securities in the name of the beneficiary;(f)provide that the liabilities of REIT securities holders, as investors in REIT securities, are limited to the assets of the trust, and include a clear and prominent statement explaining that the trust deed and the scheme documents:(i)are binding on the REIT securities holders as if each REIT securites holder had been a party to the trust deed; and(ii)that the trust deed, the scheme documents, the Act and Regulations provide the trustee and REIT manager with a range of discretions and powers and authorize and require the trustee and the REIT manager to comply with the trust deed.5.INITIAL ROLE OF PROMOTER AND OBLIGATIONSThe trust deed shall set out the role of the promoter and the ongoing relationship with the trust including—(a)the basis of payment or remuneration for the assets vested, acquired, transferred to or to be vested, transferred to or acquired by the trustee on behalf of the trust;(b)the promoter's ongoing role and any relationship with the REIT manager including any arrangement to offer future real estate acquisitions to the trustee and any involvement in development or construction or management of the real estate assets of the trust;(c)any leasing arrangement entered into or proposed to be entered into by the promoter or any connected person and the trustee;(d)any obligation by the promoter to defer its entitlements or to provide income support;(e)any lending or financing arrangement entered into or proposed to be entered into by the promoter or any connected person and the trustee; and(f)the lock up period attaching to any REIT securities issued or offered to the promoter including in exchange for or in part exchange for assets vested in, transferred to or acquired by the trustee or to be vested in, transferred to or acquired by the trustee.6.PROMOTER'S COVENANTSThe trust deed shall contain, as a minimum, the following covenants setting out the obligation by the promoter for the benefit of each the REIT securities holders as beneficiaries (including past and future REIT securities holders, the REIT manager and any subsequent trustee or REIT manager to—(a)comply with the Act, Regulations and terms of the trust deed and scheme documents to which it is a party;(b)pay the fees, expenses and costs of the trustee associated with the establishment of the trust, the authorization of the scheme; the preparation, approval and issue of any offering memorandum or prospectus including the obtaining of valuations and other expert reports and associated with the listing of the REIT securities;(c)if the scheme is to be listed, to use its best endeavours and to provide any required information or support to achieve the listing of the REIT securities in the scheme, and(d)to assist and provide any required information or support required by the trustee, REIT manager or any valuer or auditor or other party appointed by the trustee or REIT manager for the purposes of undertaking their roles in connection with the trust or the assets of the trust or in fulfilling their obligations under trust deed, the Act or Regulations.7.APPOINTMENT OF REIT MANAGER AND DUTIES OF REIT MANAGER(a)The trust deed shall provide for the appointment by the trustee of a qualified REIT manager appointed under the terms of the Act and these Regulations.(b)The REIT manager is appointed as a contractor and is not the agent of the trustee.(c)The REIT manager shall be appointed in a fiduciary capacity to fulfil the role of REIT manager as set out in the Act, the Regulations and the trust deed and to fulfil the objectives of the trust.(d)The trust deed shall set out in detail the role of and functions to be undertaken by the REIT Manager so that the roles of the REIT manager and the trustee are clearly delineated.(e)The REIT manager shall provide instructions to the trustee to implement the objectives of the trust and may appoint a property manager as its agent and other parties as agents of the REIT manager to assist it in undertaking its functions as REIT manager.(f)The REIT manager shall be liable for any acts or omissions of its agents.(g)No provision shall be included in the trust deed which exempts or purports to exempt a REIT manager from liability for any failure by it to exercise due care and diligence in the discharge of their functions in respect of the real estate investment scheme.8.APPOINTMENT, RETIREMENT, REMOVAL AND REPLACEMENT OF REIT MANAGERThe trust deed shall contain provisions for the appointment, removal and retirement of the REIT manager which reflect the requirements of the Act and the Regulations.9.OBJECTIVES OF THE REAL ESTATE INVESTMENT TRUST AND ELIGIBLE ASSETS(a)The trust deed shall set out—(a)the purpose and objectives of the trust;(b)the discretions of the trustee and the REIT manager in giving effect to the stated objectives, and(c)authorized investments and eligible real estate assets in which the trustee can invest.(b)The trust deed shall identify the initial real estate assets that have been or are to be vested in acquired by or transferred to the trustee on behalf of the trust and set out clearly the implications of the failure to acquire assets within the period of time required by the scheme documents, the Act or Regulations.(c)It shall also set out the requirements of the Act and Regulations as regarding eligible assets, requirements for minimum investment in real estate, etc., and for the generation of income and provide appropriate powers to address these requirements and the implications of noncompliance.10.TRUSTEE'S POWERS(a)The trust deed shall set out in detail the powers of the trustee and clearly delineate between the obligations of the trustee and the REIT manager.(b)The powers of the trustee may be limited to it acting in accordance with the directions of the REIT manager provided that the directions are—(i)in accordance with the terms of the trust deed and any prospectus or offering memorandum;(ii)the provisions of the Act or these Regulations and the law relating to trusts and trustees, and(iii)in the trustee's opinion are in the best interests of the REIT securities holders.(c)Any provision included in the trust deed which exempts or purports to exempt a trustee from liability for any failure to exercise due care and diligence in the discharge of their functions in respect of the real estate investment scheme is void.(d)The trust deed may provide for the trustee to delegate to an agent or officer or employee provided that the trustee remains personally liable for the fraud, negligence or default of its delegates and for the costs, fees and expenses of any delegate.(e)The trustee shall also have power to appoint valuers, lawyers, accountants and other professionals for the purpose of permitting the trustee to carry out its duties and perform its obligations and to charge the fees, cost and expenses of such as an expense to the trust.11.TRUSTEE'S BORROWING CAPACITY AND ABILITY TO CHARGE TRUST ASSETS AS SECURITY AND RIGHT TO INDEMNITY(a)The trust deed shall set out the limits of the trustee's capacity to borrow and charge the trust assets as security which comply with the provisions of the Act and Regulations.(b)The trustee shall be entitled to limit its exposure or liability for any borrowing to the assets of the trust and subject to the provisions of the Act, Regulations and the laws relating to trusts and trustees shall be entitled to be indemnified out of the assets of the trust for all losses, expenses, fees and charges incurred in the performance of its duties and obligations.12.TRUSTEE'S COVENANTSThe trust deed in addition to providing for the usual fiduciary obligations of a trustee shall contain, as a minimum, the following covenants by the trustee for the benefit of each of the REIT securities holders as beneficiaries, including past and future REIT securities holders, the REIT manager and any subsequent trustee or REIT manager to—(a)act continuously as the trustee until the trust terminates, the trustee retires or is removed in accordance with the trust deed;(b)act at all times in the best interests of the REIT securities holders as beneficiaries, to act honestly, prudently and in good faith in the performance of its duties and the exercise of discretions and to exercise all due care, skill, diligence and vigilance in carrying out its functions and duties as a trustee and in safeguarding the rights and interests of the REIT securities holders;(c)take custody and control of all assets of the trust and to hold such assets on trust for the REIT securities holders;(d)open a separate trust account or accounts in the name of the trustee and designating the real estate investment trust to which it relates, appoint authorized signatories and ensure that the trust accounts are only used for the purposes of the trust and as provided for by the scheme documents;(e)take all necessary steps to ensure that the assets of the trust are adequately protected and insured in the name of the trustee;(f)comply with the Act, Regulations and terms of the trust deed and scheme documents to which it is a party;(g)ensure that the scheme has appointed at all times a suitably authorized REIT manager and in any interim period act itself in the capacity as the REIT manager;(h)actively monitor the administration of the assets of the fund and the performance by the REIT manager to ensure compliance with the Act, Regulations and the scheme documents to which it is a party and that the interests of REIT securities holders are being upheld;(i)monitor the activities of the REIT manager to guard against the REIT manager using its position to gain directly, or indirectly an advantage for itself or another person or to cause detriment to the interests of REIT securities holders;(j)make when due all authorized payments, including distributions, required by the scheme documents or requested to be made by the REIT manager in accordance with the terms of the scheme documents;(k)cause to be kept proper books of account and records for all investments and assets of the trust, liabilities or charges incurred (including taxes and imposts), and of transactions entered into by the trustee or the REIT manager and distributions made;(l)ensure that reports and accounts are prepared as required by the Act and Regulations and circulated to REIT securities holders and filed with the Authority;(m)appoint auditors and ensure that audits are undertaken as required by the Act and the Regulations and as necessary to protect the interests of REIT securities holders;(n)appoint valuers as required and to take all reasonable steps to ensure that the assets of the trust are correctly valued and are valued as required by the Act, the Regulations and the trust deed;(o)ensure that at all times through proper, adequate and diligent supervision the fund and the scheme are managed and administered by the REIT manager in accordance with the objectives of the trust, the trust deed, the Act and the Regulations;(p)notify the Authority as required by the trust deed, the Act and the Regulations and where appropriate to protect the interests of REIT securities holders to call a meeting of REIT securities holders and take such other steps as are necessary to protect the interests of REIT securities holders if it becomes aware of a breach (including by the trustee) of the trust deed, the Act or the Regulations of any other matter that could properly be regarded by a trustee as not being in the interests of REIT securities holders;(q)convene or cause the trustee to convene meetings of REIT securities holders whenever required by the Act, the Regulations or the trust deed;(r)ensure that the offer, issue, sale or purchase or repurchase, creation, redemption or cancellation of REIT securities is in accordance with the terms of the trust deed, the Act and the Regulations;(s)not enter into any contract, agreement or arrangement which is in conflict with or purports to override any term or obligation of the trust deed, the Act or Regulations, and(t)to the extent not specified above, where the Act or Regulations impose a specific requirement, obligation or duty on the trustee then this will be reflected in the trust deed by way of a specific covenant by the trustee.13.APPOINTMENT, RETIREMENT, REMOVAL AND REPLACEMENT OF TRUSTEEThe trust deed shall include provisions which accord with the Act and Regulations for—(a)the appointment of the initial trustee and for successor trustees;(b)the retirement of the trustee;(c)vesting of the assets of the trust in a successor trustee and the transfer of all books, accounts, documents, reports and records including access to all required software and electronic records;(d)preserving the rights, obligations and liabilities and any causes of action by or against an outgoing trustee which arose or accrued before the retirement or removal of the outgoing trustee, and(e)requiring any outgoing or prior trustee to assist and join in any subsequent ction by a trustee or the Authority on behalf of REIT securities holders against any party.14.REIT MANAGER'S COVENANTSThe trust deed shall, in addition to providing for the usual obligations of a REIT manager to implement and give effect to a real estate investment trust of the designated type, contain, as a minimum, the following covenants by the REIT manager for the benefit of each the REIT securities holders as beneficiaries, including past and future REIT securities holders, the trustee and any subsequent REIT manager to—(a)conduct its business and role as the REIT manager in a proper diligent and efficient manner to implement the objectives of the trust in the exclusive, and best, interest of REIT securities holders and in compliance with the terms of the scheme documents, the Act and the Regulations;(b)act with due care, skill and diligence in managing the fund and the trust and to effectively employ the resources and procedures necessary for the proper exercise or its duties and role and to achieve the objectives and performance of the scheme;(c)comply with the Act, Regulations and terms of the trust deed and scheme documents to which it is a party;(d)acquire, invest in, manage, lease and dispose of assets as authorized in the trust deed and in accordance with the stated objectives of the trust to achieve optimum returns for REITS securities holders;(e)conduct any construction and development activities in an efficient manner within terms of the objectives of the trust and the risk profile established for the trust;(f)take all necessary steps to ensure that the assets of the trust are adequately protected and insured in the name of the trustee and segregated;(g)not to enter into or recommend to or otherwise cause the trustee to enter into contracts on behalf of the trust unless the transactions are authorized by the trust deed, are for the purposes of operating a real estate investment trust, and do not contravene the Act and the Regulations and are in the best interests of the REIT securities holders;(h)ensure that all payments or monies collected on behalf of the trustee are paid as soon as possible, and in any event no later than the next business day into the trust's designated bank account in the name of the trustee and that payments are only requested to be made from such bank account in accordance with the trust deed, the Act and Regulations;(i)ensure that all payments required to be made by the trust, including distributions, are requested from the trustee and are made when payment is due;(j)prepare recommendations as to distributions and draft distribution statements when required by the Act;(k)ensure that assets are correctly valued and are valued in time and as required by the trust deed, the Act and the Regulations;(l)not exercise any voting rights that the REIT manager may hold in respec of REIT securities in the trust except if authorized by the Act or the Regulations and to avoid conflicts of interest;(m)prepare and maintain proper accounting records in respect of the REIT manager and deliver a copy to the trustee and to prepare on behalf of the trust reports and accounts for submission to the trustee;(n)facilitate and assist in the audit of the accounts and provide access to all accounts, records, documents and reports, access to employees and whatever assistance is required for the preparation of reports and accounts for the trust and their audit;(o)notify the Authority as required by the trust deed, the Act and the Regulations and where appropriate to protect the interests of REIT securities holders to call a meeting of REIT securities holders and take such other steps as are necessary to protect the interests of REIT securities holders if it becomes aware of a breach, including by the trustee, of the trust deed, the Act or the Regulations of any other matter that could properly be regarded by a trustee as not being in the interests of REIT securities holders;(p)ensure that the offer, issue, sale or purchase or repurchase, creation, redemption or cancellation of REIT securities is in accordance with the terms of the trust deed, the Act and the Regulations and that in respect of an unlisted trust that the REIT securities of the trust are correctly priced;(q)not to make improper use of information or knowledge gained in its capacity as a REIT manager or to use its position as REIT manager to gain an improper advantage for itself or another party or to gain a direct or indirect advantage for itself or another person or to otherwise cause detriment to REIT securities holders;(r)convene or cause the trustee to convene meetings of REIT securities holders whenever required by the Act, the Regulations or the trust deed;(s)not enter into any contract, agreement or arrangement which is in conflict with or purports to override any term or obligation of the trust deed, the Act or Regulations, and(t)to the extent not specified above, where the Act of Regulations impose a specific requirement, obligation or duty on the REIT manager then this will be reflected in the trust deed by way of a specific covenant by the REIT manager.15.JOINT COVENANTS OF TRUSTEE, PROMOTER AND REIT MANAGERThe trust deed shall, as a minimum, contain the following joint covenants by the trustee and REIT Manager for the benefit of each of the REIT securities holders as beneficiaries (including past and future REIT securities holders), the trustee and the REIT manager and any subsequent trustee or REIT manager to—(a)comply with and implement the requirements of the trust deed, the Act and the Regulations and to undertake their roles and act in the best interests Of the REIT securities holders to fulfil the objectives of the trust deed;(b)if the trust is to be listed then to ensure that at all times each of the trustee and the REIT manager individually and jointly use their best endeavours to list and to maintain the listing of the scheme on the designated exchange; and(c)comply with the connected persons obligations of the trust deed, the Act and Regulations to avoid any conflict of interest and ensure that neither the REIT securities holders nor the trust are disadvantaged by any transactions entered into.16.INCOME AND CAPITAL GAINS ENTITLEMENTS AND DISTRIBUTIONSThe trust deed shall set out full particulars of—(a)the distribution policy of the scheme;(b)the entitlements of various classes of REIT securities holders to distributions of income, profits, capital gains or capital or from other sources;(c)the REIT manager and trustees obligations under the Act and the Regulations in relation to distributions and—(i)the discretion to vary distribution from the minimum specified under the Regulations; and(ii)the implications of not making a minimum distribution.17.INITIAL ISSUE OF REIT SECURITIESIn relation to the type of REIT and whether or not the REIT securities are to be listed the, trust deed shall include provisions that accord with the Act and the Regulations in relation to—(a)the issue of REIT securities;(b)issue of certificates and registration;(c)circumstances in which repurchase or redemption may be required or sought and the REIT securities holder's rights, including any period in which repurchase or redemption cannot be sought or the trustee's or REIT manager's right to defer or suspend repurchase or redemption; and(d)for unlisted REIT securities full particulars of pricing policy including, basis of calculation and regularity of re-pricing.18.NEW ISSUES OF REIT SECURITIESIn relation to the type of REIT and whether or not the REIT securities are to be listed, the trust deed shall include provisions that accord with the Act and the Regulations in relation to the—(a)powers and procedures to be adopted to issue new REIT securities;(b)entitlement of existing REIT securities holders to participate in any new issue; and(c)pricing of any new issue.19.RIGHT TO REDEMPTION OF UNITS OF REIT SECURITIES(a)The trust deed shall clearly set out whether or not the holder of REIT securities has any right to request the trustee through the REIT manager to redeem it's holding of REIT securities in whole or in part.(b)Where there is no right to request redemption, this fact shall also be stated in bold type and include a caution that the REIT securities' holders are not entitled to seek redemption.(c)Where there is no ability to seek redemption then the trust deed should clearly set out the—(i)terms on which redemption can be sought including, deferral periods, preconditions or trigger events, number, notice periods and redemption dates;(ii)process and procedure for seeking redemption;(iii)manner in which units are to be valued and the redemption price is to be calculated, and(iv)the ability of the trustee or the REIT manager to limit, suspend or cancel redemptions.20.APPOINTMENT OF VALUERS AND VALUATION OF ASSETSThe trust deed shall clearly set out, in accordance with the Act and Regulations—(a)the requirements to appoint valuers and the obligations to conduct valuations in accordance with the minimum requirements of the Act and Regulations;(b)the trustee and REIT manager's powers and obligations in relation to the appointment of valuers and the conduct of valuations; and(c)a requirement for the trustee to have discretion to conduct a valuation in the interest of REIT securities holders, and specifically address the requirements in the case of connected person transactions.21.TRUSTEE'S COSTS, FEES AND EXPENSESThe trust deed shall clearly set out, in accordance with the Act and Regulations the–(a)trustee's entitlement to fees and to receive reimbursement or charge expenses and costs to the trust;(b)method of calculation of the trustee's fees and basis of payment;(c)entitlement of the trustee to be paid fees, costs and expenses in priority to any other payment;(d)trustee's entitlement to an indemnity for fees, costs and expenses; and(e)the entitlement of the trustee, to refrain from taking any action if there are insufficient funds in the trust to pay the trustees costs and expenses of taking such action and the REIT securities holders at a meeting of REIT securities holders called by the trustee fail to agree to pay the trustee's osts and expenses.22.REIT MANAGER'S COSTS, FEES AND EXPENSESThe trust deed shall clearly set out, in accordance with the Act and Regulations the—(a)REIT manager's entitlement to fees and to receive reimbursement or charge expenses and costs to the trust;(b)costs and expenses that the REIT manager is entitled to recover and those which are included within its fee or which it is not entitled to recover from the trust;(c)method of calculation of the REIT manager's fees and basis of payment;(d)priority, if any, accorded to the payment of the REIT manager's fees, costs and expenses;(e)entitlement or obligation of the REIT manager to defer or suspend receipt of fees; and(f)any entitlement to an indemnity for fees, costs and expenses.23.AMENDMENTS TO SCHEME DOCUMENTSSet out the processes and procedures to be adopted in order for amendments to be made to scheme documents.24.CONNECTED PERSON TRANSACTIONSThe trust deed shall set out in detail the powers and obligations of the trustee and the REIT manager, subject to the requirements of the Act and Regulations, to enter into transactions with connected persons and the processes and procedures to be adopted including, the requirement to call a meeting of REIT securities holders, the voting arrangements and the limits imposed on the ability of connected persons which are also REIT securities holders or connected persons to vote at such a meeting.25.MEETINGS OF REIT SECURITIES HOLDERSThe trust deed shall set out the—(a)obligations to convene an annual meeting of REIT securities holders and the rights of the REIT securities holders at such meetings; and(b)obligations, processes and procedures for the calling of meetings by the Authority, trustee, REIT manager and REIT securities holders;(c)the trust deed shall reflect the requirements of the Act and Regulations and incorporate as a minimum the rights, obligations and entitlements set out in the Regulations.26.TRANSFERS AND RESTRICTIONS ON TRANSFERSThe trust deed shall include the processes and procedures for transfers which reflect the type of REIT and whether or not the REIT securities are to be listed, the trust deed shall include provisions that accord with the Act and the Regulations in relation to–(a)rights to transfer units;(b)the trustee's obligation to register a transfer; and(c)restrictions on transfer, requirements for evidence of qualification and the trustee's obligation and powers not to register a transfer.27.POSSIBLE FUTURE CONVERSION FROM D-REIT TO I-REIT OR ISSUE OF PROSPECTUS TO PERMIT ISSUE OR OFFER.(a)Where the REIT is a D-REIT the trust deed may include provisions relating to the rights or obligations of the REIT manager to request the trustee to exercise the conversion rights contained in the Act and Regulations.(b)Where provision is made for conversion, then the trust deed shall set out the processes and procedures to be adopted and the rights of REIT securities holders.28.TERMINATION AND WINDING UP OF THE TRUSTThe trust deed shall contain detailed provisions in relation to the termination and winding up of the trust which reflect the provisions of the Act and Regulations and the laws relating to trusts and include details of the—(a)circumstances in which the trust may be terminated or wound up;(b)rights of REIT securities holders to call for termination or winding up;(c)requirement for calling of meetings and voting rights;(d)distribution of the assets and priority of distribution; and(e)payment of expenses and provision of indemnities.SECOND SCHEDULE
| FORM 1 |
| THE CAPITAL MARKETS ACT(Cap. 485A) |
| THE CAPITAL MARKETS (REAL ESTATE INVESTMENT TRUSTS) (COLLECTIVE INVESTMENT SCHEMES) REGULATIONS |
| APPLICATION FORM |
| AUTHORIZATION AS A REAL ESTATE INVESTMENT TRUST SCHEME |
| An application for authorization of a REIT scheme shall be submitted jointly by the promoter and the trustee. (The material submitted shall be in two indexed binders. The pages of all documents submitted shall be numbered and a check list provided which cross references the relevant requirement of the Act, the Regulations and the applicable Schedule addressed).Please include the information listed below (separate sheets may be attached where necessary): |
| l. Name of the REIT. |
| 2. State whether:a. authorization is being sought as a D-REIT or an I-REITb. the REIT is structured as an open ended or closed ended fund), andc. if the REIT is to be an I-REIT it is to be the subject of a restricted offer (Regulation 10)' |
| 3. Set out in summary form the objectives of the REIT . |
| 4. Set out the name, telephone number, facsimile email address and registered office of the following parties and where a party is yet to be appointed, give details of the party proposed for appointment -a. promoter or issuer, including directors and CEO;b. transaction adviser;c. trustee, including the directors, CEO and the designated' representative/compliance officer;d. REIT Manager, including directors. CEO and the designated representative/compliance officer;e. Property Manager, if any;f. Structural Engineer;g. Project manager certifier, if any;h. Auditor and any reporting accountant;i. The valuer;j. Shariah advisor, if any;k. legal adviser. |
| 5. Please attach the following in support of the application -a. Prior consents and approvals where these are required by the Act or the Regulations; b. The Trust Deed or draft Trust Deed (please see the First Schedule for the contents of a Trust Deed);c. a draft prospectus or an offering memorandum;d. Management services agreement with the REIT manager or the proposed agreement;e. Agreements with property manager or the proposed agreement;f. Agreements with property manager certifier or the proposed agreement;g. Certified copies of valuations of real estate vested in, acquired, transferred or to be vested in, acquired or transferred to the REIT;h. Signed and dated legal opinion on the title of the real estate vested in, transferred or to be vested in, acquired or transferred to the REIT;i. Certified copy of the report of the structural engineer;j. Audited financial statements of the REIT manager for the financial year immediately preceding the application for authorization;k. Audited financial statements report of the trustee for the financial year immediately preceding the application for authorization;l. Consents of experts to inclusion;m. Certified copies of any other scheme documents and material contracts;n. In the case of an Islamic REIT a certificate of compliance with Shariah principles by the Shariah adviser; ando. the prescribed application fee. |
| |
| DATED AT ........................... THIS .............. DAY OF ...................... 20............. |
| SIGNED BY: |
| l. .................................................................PROMOTER2. ......................................................................TRUSTEE |
| The application should be accompanied by the following directors' declaration: |
| AFFIDAVIT |
| We .......................................... as directors of ...................................... Limited and .............................................. Limited, being the promoter and trustee respectively of the proposed REIT scheme, do depose and say that we have read and understood the requirements of this application form and hereby certify under oath that the foregoing answers, statements and annexures thereto are true and correct to the best of our knowledge, information and belief. |
| |
| SWORN at ............................ this day of ........................... 20 .................BY:1. ..............................................1st Deponent2. ...........................................2nd Deponent |
| BEFORE ME: |
| |
| COMMISSIONER FOR OATHS |
THIRD SCHEDULE
| FORM 2 | (r. 18(1) |
| THE CAPITAL MARKETS ACT(CAP. 485A)AUTHORISATION CERTIFICATE |
| The CAPITAL MARKETS AUTHORITY hereby certifies that .................................................................... has received authorization as a Real Estate Investment Trust Scheme under the provisions of the Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2012 issued under Section 12 of the Capital Markets Act (Cap. 485A of the Laws of Kenya). |
| CONDITIONS:................................................................................................................................................................................ |
| Dated this ........................ day of .............................. 20 ...................... |
| ........................................................................................................................................... |
| SEALED with the commonseal of the Capital MarketsAuthority in the presence of: |
| ................................................Chairperson | ..........................................Chief Executive |
| NB: Please note that the above authorization should not be construed as a recommendation as to the merits of the above scheme and the Authority shall not be liable for any action as a result of this authorization. |
FOURTH SCHEDULE
CONTENTS OF PROSPECTUS OR OFFERING MEMORANDUM
1.APPLICATIONThe provisions of this schedule apply to all issues and offers of REIT securitreswhich fall under the Act or the Regulations and apply irrespective of whetherthe issue or offer is made pursuant to a prospectus or an offering memorandum.The assets to be included in real estate investment trust scheme and theactivities of the schehe may vary significantly. Consequently there is a needfor flexibility in what is required to be disclosed. It is, however, the obligationof the issuer, the trustee and experts whose reports are contained or summarisedin the prospectus or offering memorandum to ensure that there is full, adequateand proper disclosure to potential investors and REIT securities holders andthat the structure of the transaction and the terms of all the scheme documentscomply with the Act and the Regulations.2.CONSIDERATION OF TYPE AND FINANCIAL EDUCATION OF POTENTIAL INVESTORSIn prepari4g the prospectus or offering memorandum consideration shatl also begiven to the type and level of financial education of the persons to whom theissue or offer is to be made; the levcl of disclosure required; the language used,and the level of explanation provided.3.POWER OFAUTHORITY TO GRANT EXEMPTIONS OR VARIATIONSThe Authority may grant exemptions or permit variations from the requirementsof this Schedule where it is of the opinion that such exemption or variation isrequired given the particular nature of the assets or the activities of the realestate investment trust or scheme or !o address the conversion of a D-REIT to anI-REIT or to permit a restricted I-REIT to be listed provided that such exemptionor variation would not disadvantage REIT securitigs holders or potentialinvestors in REIT securities.Authority may require inclusion of additional information or material or theomission of information or material or other changes be made to a prospectus oroffering memorandum and may impose conditions on its approval.4.REFERENCE TO ASSETS OF A REITA reference in this Schedule to assets being assets of the RElr means assetsvested, acquired, transferred or held or tro be held by the trustee under the termsof the trust deed for investors in REIT securities as REIT securities holders andas beneficiaries of the real estate investment trust.5.MINIMUM REQUIREMENTSThe Schedule sets out minimum requirements for mattirs to be included in aprospectus or offering memorandum. The requirements do not reduce or in anyway impact on the overriding obligations to provide disclosure as provided forin the Act, the Regulations and the laws of kenya.Part 1 – GENERAL REQUIREMENTS, ISSUER AND PARTIES RESPONSIBLE
1.The Schedule includes at the beginning of the document a—(a)glossary of defined terms and abbreviations;(c)whether the REIT is a D-REIT or an I-REIT or issued in connection with a D-REIT converting to an I-REIT or a restricted I-REIT becoming unrestricted, etc;(d)a clear statement of the persons to whom the offer is made or to whom the issue of REIT securities can be made and of the qualifications, if any, to be met in order for a person to invest;(e)the objectives of the REIT;(f)summary of the number, price and class of REIT securities being issued or offered and the rights attaching thereto;(g)summary of the transaction, REIT securities and key risks with a cross reference to the pages of the prospectus or offering memorandum which includes a warning in bold type-face that this is only a Summary and investors should read and understand the whole prospectus or offering memorandum;(h)Statement as to whether or not the REIT securities are to be listed or not and whether or not a REIT securities holder can seek redemption, the conditions attached to seeking redemption and include a prominent warning to investors in bold type-face in relation to the potential liquidity of the investment in REIT securities;(i)the ongoing role, if any, of the promoter or other issuer and investment in the REIT;(j)structure diagram which summarises the parties, relationship, roles of parties and cash flows;(k)a statement as to any financial structuring mechanisms utilised or incorporated in the trust structure and the potential impact on performance and on future distributions;(l)summarise the obligations of the trustee and REIT manager under the Act and the Regulations including eligible investments, source of income and minimum distributions and the impact on the taxation of the REIT or on distributions if these requirements are not complied with.2.All pages shall be consecutively numbered and a type-face of not less than Times New Roman 10 points used.3.The names, addresses and telephone numbers and email contacts of the promoter or other issuer or offeror, of each person associated with the issue or offer, the prospectus or offering memorandum or any part thereof, and their functions and shall include–(a)the Promoter or other issuer or offeror responsible for the issue and the offer and where a company or corporation the directors of such a person;(b)the transaction adviser;(c)the trustee and the trustee's directors, compliance officer and other key personnel;(d)the REIT manager and the REIT manager's directors, compliance officer and other key personnel;(e)any property manager appointed or to be appointed by the REIT manager;(f)the structural engineer;(g)any project manager certifier;(h)the valuer appointed by the trustee;(i)the auditor appointed by the trustee;(j)the reporting accountant, if any, not the auditor;(k)the REIT securities registrar;(l)the legal adviser appointed by the trustee;(m)other experts and advisers whose names appear in the prospectus or offering memorandum or who have been appointed;(n)for an Islamic REIT, details of the Shariah advisor.4.In all cases the prospectus or offering memorandum shall contain on the cover and in a prominent position in the document the words:"In making your investment decision to invest in REIT Securities you should be aware that there is very limited, if any, recourse to the assets of the issuer or the trustee.Your investment in REIT securities and as a REIT securities holder in the REIT is as an equity investor. Distributions and return of capital is not guaranteed and are entirely dependent on the performance of the assets of the real estate investment trust.Your rights in most cases will be limited solely to the assets of the real estate investment trust.If the trustee is authorized to borrow on behalf of the trust then your rights to distributions and to the assets will rank after the payments to lenders.The trustee, REIT manager and other parties are also entitled to receive payment of fees and expenses ahead of payments to REIT securities holders who invest in REIT securities."5.The date of publication of the prospectus or offering memorandum and the period for which the offer is open and how applications can be made. A statement that no REIT securities can be issued based on this prospectus or offering memorandum wore than six months after the stated date of the publication of the prospectus or offering memorandum.6.A statement that the scheme has been authorized by the Authority but that authorization by the Authority is not a recommendation or a statement by the Authority in relation to the suitability of the REIT for investment or as to the risks AND that the Authority has no liability.7.A statement that the prospectus or offering memorandum has been approved by the Authority and the limitation on the liability of the Authority but that approval by the Authority is not a recommendation or a statement by the Authority in relation to the suitability of the REIT for investment or as to the risks AND that the Authority has no liability.8.Include a statement in the following words:"If you are in any doubt about the contents of this document or the nature or the transaction or investment or the risks attached to the investment then you should consult a person licensed under The Capital Markets Act who specialises in advising on investments in or acquisitions of securities, including REIT securities in schemes."9.For an Islamic scheme the following statement shall also be included:The [..............................................] real estate investment trust scheme has been certified as being Shariah compliant by the Shariah Advisor appointed to the scheme."10.A statement as to the full accountability for liability for statements and misrepresentations included in the prospectus or offering memorandum and omissions by the promoter, issuer and the liability of other parties and experts for statements made by them and inclusions, misrepresentations and omissions.11.Include a statement, signed by each of, the directors of the issuer or offeror, the transaction adviser and the legal adviser appointed by the trustee to act on behalf of REIT securities holders that–(a)the prospectus, offering memorandum and the scheme documents comply with the Act and the Regulations, and(b)in the case of the issuer and the directors of the issuer that they, collectively and individually, and having made all reasonable enquiries confirm to the best of their knowledge and belief, that there are no false or misleading statements or omissions of other facts which would make any statement in the prospectus or offering memorandum false or misleading.Part 2 – THE STRUCTURE OF THE TRANSACTION, THE TRUST, THE FUND, SCHEME & NATURE OF THE REIT SECURITIES BEING ISSUED OR OFFERED & OBJECTIVES
1.An explanation of the nature of the investment being offered as REIT securities in the form of units in a trust established as a real estate investment trust and an authorized real estate investment trust scheme authorized by the Authority, including–(a)an explanation of the nature of a trust and the respective roles of the trustee and the REIT manager;(b)detail of the REIT securities being issued or offered, their class and the rights attached thereto and restrictions on the persons to whom an issue or an offer can be made;(c)details of any restrictions on the transferability of REIT securities;(d)the term of the trust;(e)whether the trust is to be open or closed and the implications;(f)listing and redemption rights and entitlements;(g)the classification as either a D-REIT or an I-REIT or as a D-REIT converting to an I-REIT or a restricted I-REIT converting to an unrestricted I-REIT;(h)the objectives of the trust and of the scheme;(i)whether the REIT is an Islamic REIT;(j)a brief description of the investment strategy of the REIT manager to meet the objectives of the fund and the scheme;(k)the number and price of the REIT securities being issued or offered;(l)the use to be made of the proceeds of the issue or offer;(m)how an application for REIT securities can be made and the closing date for applications;(n)the costs, fees and charges associated with the establishment of the REIT and the scheme and by whom these are to be paid.2.Include details of the requirements for continuing as an authorized real estate investment trust scheme and the requirements including those relating to investment in eligible assets, income and distribution of the Act and Regulations and the taxation implications for the scheme and on distributions for failure to comply.Part 3 – ELIGIBLE ASSETS OF THE TRUST AND PROPOSED ACTIVITIES OF THE SCHEME
1.Include a summary of the eligible or permitted assets of the specific REIT including restrictions and the focus and objectives of the fund and the scheme. These must comply with the Act and the Regulations but may impose additional restrictions on the sectors or type of assets that the trustee is authorized to invest in and the activities of the scheme, including the trustee's power to borrow and the level of development and construction activities that an I-REIT may engage in.2.Detail the assets vested in the Trust, when and from whom acquired or transferred and the price paid and if not in cash the consideration paid, including by way of issue of REIT securities or otherwise.3.Include details of the real estate assets that it is proposed to invest in and/or the initial development and construction activities that it is initially proposed to engage in. These shall be supported by–(a)valuations and structural engineer's reports to be summarised in the prospectus or offering memorandum;(b)full copies of the valuations and reports shall be included in the list of documents available for inspection; and(c)summarized details of the legal opinion in relation to transfer or acquisition of the real estate and the title shall be included in the prospectus or offering memorandum with full copies available for inspection.4.Detail the strategy of the REIT manager in implementing the objectives.5.Where the REIT is a D-REIT detail–(a)the development and construction activities to be undertaken and the budget and estimates for undertaking such activities;(b)consents and approvals to be obtained and the time frame for such;(c)the time frame over which the total development and construction activities are intended to be conducted;(d)the REIT manager's strategy as to sale or lease of the completed properties or a combination of both and the time frame until it is anticipated that cash flows will be generated;(e)include details of any foreign exchange exposure, for example, as regards the acquisition of any plant or equipment or building materials; and(f)include details of any structural engineer's report or of a quantity surveyor or of any project manager.6.Details of permitted non-real estate assets and restrictions on investment and REIT manager's strategy as regards such investment.7.Risk management strategies to be employed by the REIT manager.8.If the REIT is an I-REIT but proposes undertaking development and construction activities within the limit provided for in the Act and Regulations detail the development and construction activities to be undertaken, consents and approvals required, and the budget and estimates for undertaking such activities and the time frame over which such activities shall be conducted and the time frame until it is anticipated that cash flows will be generated and the potential impact of delays or cost increases on the performance of the scheme and on distributions and the exposure, if any, to foreign exchange risk.9.Include details of the level of borrowings and the assumed terms and interest rates.10.Include details of the limitations contained in the Act and Regulations depending on the classification of the REIT, on borrowing levels and on the REIT manager's strategy on borrowings and level of gearing of the assets of the REIT.11.Include a statement that material changes can only be made to the objectives and eligible assets of the REIT if authorized by the Act and the Regulations and approved by the REIT securities holders.12.An Islamic REIT shall also include details of the Shariah compliance process adopted to ensure compliance and the limits imposed.Part 4 – THE REIT MANAGER AND ANY PROPERTY MANAGER
1.Provide details of the REIT manager including, of directors and key personnel and their experience in the management of property, and resources and experience in the conduct of development and construction activities.2.Outline the role of the REIT manager and its obligations as a fiduciary to REIT securities holders.3.Detail how the REIT manager proposes to fulfil its role and obligations and appointments of agents, including a property manager or structural engineer or project manager, or delegations it has made or it proposes to make.4.Policy on the making of recommendations to the trustee of distributions and the implications of a lower than the prescribed minimum distribution being made.5.Include details of any property manager and its experience and of the fees to be paid to any property manager by the REIT manager.6.Include as an Appendix the last audited accounts of the REIT manager and any property manager.7.Include details of the term of the appointment, rights to reappointment, rights to resign and the rights to remove the REIT manager and its rights to fees and to payment or reimbursement of expenses.8.Include a statement as to the REIT manager's prior or any ongoing association with the promoter, issuer or any other party associated with the REIT or the real estate assets transferred or to be acquired and its ongoing connections or roles.Part 5 – THE TRUSTEE
1.Details of the trustee including directors, name of its chief executive officer and of the compliance officer.2.Include details of the trustee's experience, resources and its other key personnel.3.Include a description of the trustee's role, duties, responsibilities and obligations as a fiduciary and its powers.4.Disclose the trustee's powers to recommend a lower distribution and the implications of a lower than the prescribed minimum distribution being made.5.Disclose any potentially conflicting or competing roles and detail any current, pending or threatened litigation against the trustee which might materially affect the resources or financial capacity of the trustee to fulfil its role or responsibilities as the trustee of the REIT.6.Include as an Appendix the last audited accounts of the trustee.Part 6 – KEY TERMS OF THE TRUST DEED AND SCHEME DOCUMENTS
1.A summary of the key aspects of the trust deed shall be included. This summary shall as a minimum include details of (where the required details have been disclosed elsewhere in the document then a cross reference may be included in this Part)–(a)The trustee's, REIT manager's, valuers', auditor's and structural engineer's and any project manager's roles, responsibilities and obligations.(b)The liabilities of the trustee and REIT manager and the invalidity of any purported limitation on fiduciary liability.(c)The powers of the trustee and REIT manager.(d)The requirement to appoint and provisions relating to the removal, retirement or replacement of–(v)structural engineers; and(e)The obligation to conduct valuations and frequency of valuations.(f)The obligation to call meetings and the rights of REIT securities holders to call meetings and receive reports and financial statements.(g)Rights of REIT securities holders, including limitations of those rights and decisions or actions requiring the approval of REIT securities holders.(h)Requirements for listing, if any.(i)Rights and limits on the ability to call for or to obtain redemption of REIT securities.(j)Circumstances in which connected persons are not permitted to exercise voting rights in respect of REIT securities held by them.(k)Maximum fees and charges permitted by the trust deed and payable by investors either directly or indirectly or out of the assets of the trust.(l)Permitted expenses, costs and charges payable out of or reimbursable from the assets of the fund.(m)The termination or winding up of the trust and scheme.(n)Where the REIT is an Islamic REIT the requirements relating to maintenance of status and the role of the Shariah Adviser and provision of statements of compliance and the obligations of the trustee, REIT manager and any property manager to ensure that the REIT remains Shariah compliant including, as regards investment in real estate and non-real estate assets, renting of premises only for permissible uses and within acceptable limits, financing through Shariah compliant Islamic instruments and through effecting insurance of the assets with Takaful schemes.2.Shall include a summary of the material terms of other scheme documents including any documents appointing or governing the relationship with the REIT manager or any other party or adviser or underwriter.Part 7 – THE ASSETS, VALUATIONS & BASIS OF VALUATION & HISTORIC INFORMATION ON THE INCOME & EXPENSES ASSOCIATED WITH THE ASSETS
1.Included shall be full details of the real estate and other assets vested or to be vested in acquired or transferred to the REIT within the first year and the proposed dates of vesting, transfer or acquisition.2.The implications, under Regulation 66 or 77, of the failure to invest within one hundred and eighty days should clearly be set out.3.The details required will vary significantly depending on the nature of the assets and the real estate sector. For example, the considerations for investment in office buildings will be largely determined by the market for office accommodation and the state of the economy, this contrasts with real estate investments in, for example, residential housing, hospitals, hotels, retail shopping malls, factories or storage or ports or other sectors. In each case the key drivers will vary and the information disclosed will need to be adapted. By way of an example only the prospectus or offering memorandum shall include–(a)Title particulars of real estate.(b)Details of any encumbrances, easements or restrictions on use.(c)Confirmation that the REIT owns or will own on completion of the vesting, transfer or acquisition the whole of each real estate asset or if not detail extent and confirm compliance with the requirements of the Act and Regulations.(d)Description of any buildings or fixtures erected on any land together including age, with details of the structural engineer's report on the real estate, including details of monies which the structural engineer estimates need to be spent on the real estate assets in order to being them to a reasonable state of repair together with estimates of ongoing maintenance requirements for and costs.(e)Photographs may be included but these shall be not more than six months old.(f)Details of the price for which the property was acquired or the value of the consideration and the terms of any vesting, transfer or acquisition or proposed, including the issue of REIT securities and the basis on which the price paid or consideration provided was determined.(g)A full copy of the structural engineer's report shall be included in the documents available for inspection.(h)Details of current usage and permitted usage for each property and lettable area or other relevant metric.(i)If the real estate vested in or to be acquired by or transferred to the REIT is currently leased then, details of –(i)existing and contracted tenancies including, area tenanted, number of leases, term for each lease, an expiry profile for leases as a whole, gross rental income and concentrations, details of rent reviews and occupancy rates for prior three years (where applicable);(ii)historic vacancy factors;(iii)the levels of rent relative to the current market;(iv)revenues received for the past three years where available;(v)rents in arrears or written off;(vi)the operating costs including, maintenance;(vii)provision of depreciation, amortization of assets or for replacement of capital; and(viii)profit before and after tax.(j)Where the transaction involves a sale and lease back or there is a lease to the promoter or other connected party then details of the basis of ascertaining the rental and an estimate from the principal valuer of the market rent.(k)If the real estate vested in or to be acquired by or transferred to the REIT is not currently leased is proposed to be leased then details of the estimated gross rental and terms and an estimate from the principal valuer of the market rent and an estimate of the time required and fees, costs and expenses estimated to be incurred in order to lease the real estate.(l)In the case of real estate being acquired or transferred-(i)the stage of acquisition or transfer;(ii)from whom it is being acquired or transferred;(iii)conditions and terms of the acquisition or transfer including price or other consideration;(iv)scheduled date for completion;(v)details of the valuations.4.Where a REIT is a D-REIT or is an I-REIT that proposes to undertake development and construction activities then the prospectus or offering memorandum shall include–(a)Details of the real estate on which the development or construction is to be undertaken including as applicable the details required in 1, above;(b)Details of the price for which the property was acquired or the value of the consideration and the terms of any vesting, transfer or acquisition or proposed, including the issue of REIT securities and the basis on which the price paid or consideration provided was determined;(c)Details of the project including intended usage of the real estate on completion and the property manager's strategy for marketing the real estate or acquiring tenants;(d)A detailed description of the development or construction to be undertaken and of any report or estimates by the project manager;(e)Details of approvals and consents required and the time frame for obtaining;(f)A budget, work plan and time-frame to undertake the development and construction together with details of all consents and approval required and costings;(g)An assessment from the structural engineer and the project manager as appropriate as to whether or not it considers the budget and costings for the development and/or construction are reasonable;(h)An assessment by the REIT manager of the market to sell or lease up the real estate when completed together with any expert assessments of the market.5.A table reflecting the objectives and classification of the REIT that sets out the key assumptions underlying any projections included in the prospectus or information memorandum and a sensitivity analysis of the impact on income, earnings, profits and distributions to implement the assumptions including–(a)Failure to let up to assumed level within the scheduled time;(b)Failure to achieve assumed rents;(c)Cost over runs for development and construction;(d)Time overruns for development and construction;(e)Changes in interest rates;(f)The impact of any financial structuring;(g)Any other material factors.6.Details of the valuations obtained in respect of the real estate and other assets vested in or proposed to be acquired by or transferred to the REIT including basis of valuation.7.The date of each valuation and the basis of valuation.8.Policy in relation to revaluations and requirements of the Act and Regulations for revaluations.9.Where the trust deed authorizes the trustee of the REIT to invest in non-real estate assets detail the investments in which the trustee is authorized to invest, the investment strategy and trading policy that the REIT manager proposes to adopt and the timing of valuations and basis of valuation.10.Where the REIT is an Islamic REIT the prospectus or offering memorandum shall include details of the assessment by the Shariah Adviser of the real estate vested in the REIT or to be acquired or transferred to the REIT together with a list of non-permissible activities and tenancies and detail the REIT manager's strategy to comply with Shariah requirements including as regards financing of the REIT through Shariah compliant Islamic instruments, the investment of monies not invested in real-estate and the insurance of the assets through Takaful schemes.Part 8 – APPOINTMENT & ROLE OF STRUCTURAL ENGINEER & PROJECT MANAGER CERTIFIER
1.Details of the structural engineer including details of experience, resources and key personnel.2.Include a description of the structural engineer's role, duties, responsibilities and obligations.3.Disclose any potentially conflicting interests or competing roles.4.Details of the appointment of any project manager certifier including, details of experience, resources and key personnel.5.Include a description of the project manager certifier's role, duties, responsibilities and obligations.6.Disclose any potentially conflicting interests or competing roles.Part 11 – THE ROLE OF THE PROMOTER OR ISSUER & ONGOING RELATIONSHIP & HOLDINGS OF REIT SECURITIES, NCLUDING LOCK-UP PERIODS
1.Provide details of the promoter or issuer.2.Include details of any property vested or to be transferred or acquired by the REIT and details of the price paid in cash or REIT securities or other consideration or of value attributed.3.Include a summary of the requirements under the Act or Regulations for the promoter to maintain an investment in REIT securities in the REIT.4.Include details of the percentage and value of REIT securities held or to be issued to the promoter and obligations as regards retention and lock up periods.5.Provide details of the ongoing relationship of the promoter or of persons connected with the promoter with the REIT and proposed roles, including any option or right of first refusal to acquire real estate assets.6.Details of the promoter's capacity, if any, to fund overruns and to receive additional REIT securities as a consequence. Unless the promoter has undertaken to fund any cost overruns then it should be clearly stated in bold type that the promoter may but has no obligation to fund cost overruns.Part 12 – CONNECTED PARTY TRANSACTIONS
1.Include details of any existing relationships and potential conflict of interest situations together with the steps taken to address such conflicts or potential conflicts and any proposed connected party transactions including roles to be undertaken by connected persons, e.g. as REIT manager.2.Detail the processes to be adopted to address potential conflicts of interest and in particular conflicts with connected persons.3.Detail the rights of the REIT securities holders to vote on proposed connected person transactions.Part 13 – KEY DATA & MARKET
1.Key information shall be included on the real estate market in which the REIT proposes to invest.2.The data that is relevant will vary significantly depending on the sector of proposed investment and classification of the REIT and the activities in which it proposes to involve. Data might include but not be limited to, brief information on the following and references to–(a)Relevant details on supply and demand in the market for real estate in specified locations.(c)Rental property supply and demand in specified locations.(e)Impact of the economy on demand for real estate, real estate prices and rents.(f)Key drivers of the income from the sector being invested in or on capital gains or profits from sale.(g)Government policies and their impact.3.Where the REIT is an Islamic REIT the information shall take account of any limits or special requirements resulting from the need to maintain Shariah compliance.Part 14 – DETAILS OF ANY FINANCIAL STRUCTURING INCORPORATED OR TO BE INCORPORATED IN THE SCHEME & POTENTIAL IMPACT ON PERFORMANCE OF SCHEME AND FUTURE DISTRIBUTIONS
Provide as required by the Act and Regulations details of any financial structuring as required by Regulation 36.Part 15 – RISKS
1.The prospectus or offering memorandum shall contain information on the risk factors relating to investment in REIT securities. The risks disclosed shall include the risks–(a)generally of investment in REIT securities;(b)associated with the particular REIT given its structure, classification and objectives and strategy; and(c)specifically associated with the investment portfolio or assets of this REIT and its objectives and proposed activities.2.Risks, where possible, shall be listed based on potential severity and impact.3.Where appropriate and possible a sensitivity table or other method for quantifying the risk and its potential impact shall be included.4.For major risks any mitigating factors or risk management mechanisms employed or proposed by the REIT manager shall be disclosed.5.Disclaimers included shall not be so wide as to cause the disclosure of the risks to be of little or no benefit to investors in REIT securities.Part 16 – TRUSTEE'S POWER TO BORROW ON BEHALF OF THE TRUST & CHARGE OR PLEDGE ASSETS AS SECURITY
Provide details of–(a)the trustee's powers under the trust deed to borrow or raise finance for the purposes of the trust and to provide security for such borrowing by charging or pledging the assets of the REIT;(b)the limits contained in the Act or Regulations on the trustee’s powers;(c)circumstances, if any, in which REIT securities holder may be required to vote to approve a borrowing by the trustee;(d)the implications of the trustee exceeding the limits in the Act or Regulations or the limits set out in the trust deed.Part 17 – EXPERTS OPINIONS AND LEGAL OPINIONS
1.The prospectus or offering memorandum shall include a summary of any opinions obtained from experts or upon which the promoter or issuer has placed reliance for statements made in the prospectus or offering memorandum and the reports shall be included in the list of documents available for inspection.2.Details of the legal opinion obtained by the trustee in relation to the title of any real estate asset vested in or to be acquired by or transferred to the REIT, compliance with the Act and Regulations and in respect of any other matters required by the trust deed, the scheme documents, the Act or Regulations.3.Where a prospectus or offering memorandum contains a summary of or excerpt from an expert's report, the complete report of which is included as an additional document available for inspection then there shall also be included a statement from that expert stating whether or not the report was prepared for inclusion in the prospectus or offering memorandum and whether or not the summary or excerpt accurately reflects their opinion and is relevant in the context in which it is used.4.All experts’ reports shall be signed by the expert and dated not more than ninety days prior to the date of publication of the prospectus or offering memorandum. Reports may be updated by the expert confirming that the opinion is unchanged and is still relevant.5.Experts' opinions that include disclaimers that are so wide that the report is of little or no value to potential investors in REIT securities may be misleading and shall not be included.Part 18 – FEES, COSTS AND EXPENSES
1.Include details of all fees, costs and expenses payable in respect of the issue or offer of the REIT securities including underwriting fees and amounts reimbursable to any party, the manner of calculation together with details of who is responsible for the payment of such.2.Provide details of all fees, costs and expenses payable by the trustee out of the assets of the trust and the manner of their calculation.3.Include a statement of the estimated MER of the REIT.4.Provide details of the limits imposed by the Act or Regulations on the charging of fees or the reimbursement of expenses.Part 19 – DISTRIBUTION POLICY AND FACTORS DETERMINING DISTRIBUTION
1.Provide details of the distribution policy set out in the trust deed.2.Include a statement of the requirements under the Act or Regulations to make distributions and of the impact of the failure to make minimum distributions.3.Detail the powers and obligations of the REIT manager and the trustee with respect to distributions and any requirements for a vote of REIT securities holders.Part 20 – TAXATION, DISCRETION AS REGARDS DISTRIBUTIONS & IMPLICATIONS FOR TAXATION TREATMENT OF THE REIT AND DISTRIBUTIONS
1.Provide details of the taxation treatment of the income, trading profit, capital gains and profit of the REIT and of the taxation of distributions including withholding tax obligations.2.Provide details of any expert opinion obtained and addressed to the trustee for the benefit of the investors in REIT securities to support the conclusions set out in 1,above. The full opinion shall be included in list of additional documents available for inspection.3.Provide details of the circumstances in which such taxation treatment could vary and in particular of the implications of failure to comply with specific provisions of the Act or the Regulations.Part 21 – TRANSFERABILITY OF REIT SECURITIES, LISTING AND REDEMPTION
Given the nature of the assets in which REITs invest the ability of the REIT manager to provide for redemptions is in most circumstances extremely limited and redemption may not be available or only available after the happening of specified trigger events.1.Include details of any restriction on the transferability of the REIT securities.2.Include details of the intention to list the REIT securities on a securities exchange and the persons who can trade on such an exchange.3.Where there is no right to request redemption then this fact should also be stated in bold type and include a caution that the REIT securities’ holders are not entitled to seek redemption.4.Where redemption is provided for then include an explanation of how the REIT manager and the trustee are to fund redemptions and their powers to limit or freeze redemptions.5.Where there is an ability to seek redemption then the trust deed should clearly set out the–(a)terms on which redemption can be sought including, deferral periods, preconditions or trigger events, number, notice periods and redemption dates;(b)process and procedure for seeking redemption;(c)manner in which units are to be valued and the redemption price is to be calculated; and(d)the ability of the trustee or the REIT manager to limit, suspend or cancel redemptions.6.Where REIT securities are not to be listed then a prominent warning in bold type-face shall be included warning that the investment has limited, if any, liquidity and drawing attention to the rights to redemption, if any, or the lack thereof.Part 22 – ACCOUNTS AND PRO FORMA ACCOUNTS AND FINANCIAL STATEMENTS
1.All pro forma accounts and the pro forma financial statements included shall be identified as being pro forma only and to be clearly labeled in bold type-face as having been included for illustrative purposes only and being based on a number of assumptions which may or may not eventuate.2.A statement shall be included that the pro forma accounts and balance sheet have been prepared in accordance with IFRS.3.Where forecasts are included based on assumptions then in addition to the assumptions being clearly identified and highlighted a sensitivity table or tables shall be included to indicate the implications of changes in the key assumptions or variables.4.Any accounts or financial statements of the trustee or REIT manager should be clearly labeled as such and a statement included in bold type that the investor in REIT securities only has recourse to the assets of the real estate investment trust and not to the assets of the trustee or the REIT manager.A. For newly formed I-REIT with income producing properties
1.Where a newly formed RElT has property vested in it or real estate assets have or are to be acquired or transferred to the REIT which assets have had an income stream then the prospectus or offering memorandum shall include by way of illustration only pro forma financial statements prepared on the assumption that the REIT had been in existence for the three years immediately preceding the date of the prospectus or offering memorandum or if the real estate assets had not been income producing for three years then for such lesser period.2.The pro forma financial statements shall–(a)be clearly identified as pro forma accounts prepared for illustrative purposes only;(b)be prepared based on IFRS and show the income and all outgoings and expenses of the real estate assets including, maintenance, capital works and depreciation or capital allowances or permissible allocations to reserves or sinking funds for the replacement of capital assets and include estimates for fees and expenses that would have been payable for, for example, trustee's fees, REIT manager's fees, valuation costs and audit costs if the real estate assets had been assets of the REIT during that period. Allowance shall also be made for the any costs of the establishment of the REIT and for acquisition costs if these are to be borne by the REIT;(c)clearly identify variations to take account of REIT specific fees, charges, expenses and other adjustments.3.Provision shall be made in the pro forma accounts for the payment of the minimum distribution provided for in the Act or Regulations.4.Where the I-REIT proposes to undertake any development or construction activities within the first year after the date of the prospectus or offering memorandum then the impact of such activities on returns shall be illustrated through adjustments made to the last year of the pro forma accounts. These adjustments and the underlying assumptions on which they are based shall be clearly identified.5.The objective of the pro forma accounts is to illustrate the returns that would have been received if the real estate had been assets of the REIT for that period and an analysis of the performance of the assets shall be included.B. For a newly formed I-REIT with real estate assets a substantial proportion of which have not previously been income producing
1.Pro forma accounts, for illustrative purposes only, based on forecasts for the next full year of operation shall be included.2.These shall be based on the reasonable expectations of the promoter and REIT manager and there shall be clear identification and differentiation of–(a)known information based, for example, on leases entered into, and existing contracts and finance charges;(b)Assumed income and costs charges, expenditure and provisions for e.g. depreciation etc. any proposed development and construction costs and expenses including allowances for over runs, and c. The underlying assumptions on which income or expenses are based shall be clearly stated.3.Provision shall be made in the pro forma accounts for the payment of the minimum distribution provided for in the Act or Regulations.C. For a newly formed D-REIT with real estate assets in a development and construction phase a substantial proportion of which have not previously been income producing
1.Include pro forma accounts, for illustrative purposes only, based on forecasts for the next full year of operation.2.These shall be based on the contracted work, known liabilities and commitments, budgets and work plans for the period and the reasonable expectations of the promoter and REIT manager and there shall be clear identification and differentiation of–(a)known information based, for example, on leases entered into, and existing contracts and finance charges;(b)assumed development and construction costs and expenses including allowances for over runs, any income and costs charges, expenditure and provisions for e.g. depreciation etc.; and(c)the underlying assumptions on which costs income or expenses are based shall be clearly stated.D. For a D-REIT converting to an I-REIT or a restricted I-REIT which proposes to become unrestricted
1.Include, for illustrative purposes only, a pro forma accounts based on the three years prior audited financial statements prepared by the trustee in respect of the REIT, adjusted only to take account of the additional costs, if any, that would have been incurred if the REIT had been an I-REIT or an unrestricted I-REIT for the period.2.Provision shall be made in the pro forma accounts for the payment of the minimum distribution, if any, provided for in the Act or Regulations.E. Pro forma Financial Statements for all classifications of REITs
1.Include, for illustrative purposes only, a pro forma balance sheet as at the projected date of the closing of the issue or offer and adjusted for, as appropriate–(a)vesting of assets and proposed contracted acquisitions;(b)proceeds from the issue of REIT securities and proposed use of funds;(c)borrowings contracted or proposed to be entered into on closing;(d)contracted development and construction activities;(e)other contractual obligations;(f)requirements for minimum distributions, if any, provided for in the Act or Regulations; and(g)costs of acquisitions and the issue.2.All adjustments and underlying assumptions shall be clearly identified and highlighted.3.The pro forma balance sheet shall be accompanied by a reporting accountant's or auditor's letter confirming that it has been prepared as a pro forma balance sheet in accordance with IFRS and the accounting policies recommended by the REIT manager and adopted by the trustee on behalf of the REIT.Part 23 – MEETINGS, REPORTS AND ACCOUNTS & REIT SECURITIES HOLDER'S RIGHTS
1.The prospectus or offering memorandum shall include in summary form details of–(a)requirements for meetings and the rights or REIT securities holders to require the calling of meetings;(b)provisions as to notice required for meetings and procedures and voting and the voting level required to pass ordinary and special resolutions;(c)list those matters which require a special resolution;(d)list those matters which are required to be put to a vote of REIT securities holders;(e)REIT securities holder's right to receive reports and financial statements;(f)include a brief statement of the key rights of REIT securities holders.2.Where any matters required to be disclosed in this Part have been included in another Part then they may be addressed in this part by the inclusion of a cross-reference.Part 24 – ADDITIONAL INFORMATION
1.The prospectus or offering memorandum shall disclose any additional information relevant to a potential investor in REIT securities where the failure to include could constitute an omission or lead to information contained being misleading.2.In particular there shall be full disclosure of all material contracts (including contracts not reduced to writing).Part 25 – CONSENTS
1.The prospectus or offering memorandum shall include a statement of consent from all relevant parties and from all parties named in the document consent in to their being named in the document in the form and context in which it appears together with the statement that they have not subsequently withdrawn their consent.2.Signed copies of consents, dated not more than thirty days prior to the date of publication of the prospectus or offering memorandum shall be included in the list of documents available for inspection.Part 26 – DOCUMENTS AND ADDITIONAL DOCUMENTS AVAILABLE FOR INSPECTION
1.The prospectus or offering memorandum shall contain a statement that for a period of not less than three years from the date of the approval of the prospectus or offering memorandum by the Authority copies of the documents listed in the prospectus or offering memorandum shall be available for inspection at the registered office of the trustee or such other address as the Authority may approve and subsequently shall be made available by the trustee for inspection for a period of eight years from the date of approval of the prospectus on the giving of fourteen days' notice in writing to the trustee.2.Documents shall include–(a)the trust deed and any supplemental deeds;(b)each contract disclosed in the prospectus or offering memorandum (including agreements with the REIT manager or any loan or funding agreements), and in the case of a contract not reduced to writing, a memorandum setting out the parties, date and full particulars;(c)all valuation reports obtained in respect of the real estate assets;(d)structural engineer reports;(e)any reports by any project manager certifier;(h)where applicable the audited annual and semi-annual or interim reports and financial statements for the trust for whichever is the later of the three years prior to the date of approval of the prospectus or offering memorandum or from the date of formation of the trust;(i)audited financial statements for the trustee and REIT manager for whichever is the later of the three years prior to the date of approval of the prospectus or offering memorandum or from the date of formation of the entity;(j)all reports, letters, opinions or other documents and statements by any expert, any part of which is extracted in or summarized in or referred to in the prospectus or offering memorandum and where an extract or summary is included the corresponding full report shall be made available for inspection;(k)signed and dated consents given by any experts and copies of any withdrawals of consents;(l)underwriting agreements;(m)any letters with any parties whether enforceable or not; and(n)copies of any court orders or other documents relating to court actions commenced against the trustee or the REIT manager in the previous three years relating respectively, to the conduct of their duties as a trustee or REIT manager.Part 27 – ADDITIONAL MATERIAL TO BE INCLUDED WHERE A D-REIT IS CONVERTING TO AN I-REIT
Where a prospectus or offering memorandum is being issued as part of the process of conversion of a D-REIT to an I-REIT then the prospectus or offering memorandum shall include–(a)details of amendments or amendments proposed to be made to the trust deed;(b)all information that would have been required to be included in the prospectus or offering memorandum for an I-REIT including current experts' reports;(c)details of the audited annual and semi-annual or interim reports and financial statements for the trust for whichever is the later of, the three years prior to the date of the prospectus or offering memorandum, or from the date of approval of the D-REIT;(d)valuation reports for the later of the three years prior to the date of the prospectus or offering memorandum or from the date of approval of the D-REIT;(e)compliance reports for the later of the three years prior to the date of the prospectus or offering memorandum or from the date of approval of the D-REIT;(f)details of amendments proposed to the trust deed;(g)details of all distributions made since the establishment of the D-REIT, the percentage distributed and the source of the distribution;(h)details of the taxation treatment of the D-REIT and of distributions made;(i)details of the periodic trustee compliance reports for the previous three years;(j)details of any legal action or proceeding commenced against or by the trustee or the REIT manager in the previous three years or which is current or has not been settled;(k)details of any action taken by the Authority or any other government body or authority in respect of the scheme, the trustee or the REIT manager or any auditor, valuer or structural engineer of the REIT.Part 28 – ADDITIONAL INFORMATION TO BE INCLUDED WHERE A RESTRICTED I-REIT IS CONVERTING INTO AN UNRESTRICTED I-REIT TO BE LISTED AND NOT SUBJECT TO RESTRICTIONS
Where a prospectus or offering memorandum is being issued as part of the process of conversion of a restricted I-REIT to a listed unrestricted I-REIT not subject to restrictions then the prospectus shall include, all information that would have been required to be included in the prospectus for an I-REIT with unrestricted listing including–(a)current experts reports;(b)details of the amendments made or to be made to the trust deed;(c)details of the audited annual and semi-annual or interim reports and financial statements for the trust for whichever is the later of, the three years prior to the date of the prospectus or offering memorandum, or from the date of the original approval as an I-REIT;(d)valuation reports for the later of the three years prior to the date of the prospectus or offering memorandum or from the date of the original approval as an I-REIT;(e)compliance reports for the Eater of the three years prior to the date of the prospectus or offering memorandum or from the date of the original approval as an I-REIT;(f)details of amendments proposed to the trust deed;(g)details of all distributions made since the establishment of the I-REIT the percentage distributed and the source of the distribution;(h)details of the taxation treatment of the I-REIT and of distributions made;(i)details of the periodic trustee compliance reports for the previous three years;(j)details of any legal action or proceeding commenced against or by the trustee or the REIT manager in the previous three years or which is current or has not been settled;(k)details of any action taken by the Authority or any other government body or authority in respect of the scheme, the trustee or the REIT manager or any auditor, valuer or structural engineer of the REIT.Part 29 – APPLICATION FOR REIT SECURITIES & APPLICATION FORM
1.The prospectus or offering memorandum shall set out details on how to apply for REIT securities and to complete the application and include an Application Form.2.The prospectus or offering memorandum shall specify the minimum number and value of REIT securities that can be applied for and detail the process to determine allocation and the discretions, if any, vested in the issuer including, to –(a)determine the number of REIT securities to be issued or allocated to any applicant;(b)to extend the closing date for the issue or offer; or(c)to withdraw the offer in the event that a minimum subscription is not reached.3.Where the offering memorandum relates to a D-REIT or an issue or offer in respect of a restricted I-REIT then both the offering memorandum and the Application Form shall set out the requirements for an investor to qualify as a professional investor to whom the REIT securities may be issued or offered and contain a warning that the REIT securities can only be transferred to another qualified investor.4.The prospectus or an offering memorandum shall state that applications for REIT securities can only be made on the Application Form attached to the prospectus or offering memorandum.5.An offering memorandum shall comply with the Act and Regulations and any other laws of Kenya relating to the issue or offer of securities to professional investors or to any other person.FIFTH SCHEDULE
CONTENTS OF SEMI-ANNUAL REPORT, ANNUAL REPORT AND FINANCIAL STATEMENTS
1.MINIMUM STANDARDS(a)The semi-annual and annual report and financial statements for a real estate investment trust scheme must include all of the information required by this Schedule; comply with the provisions of the Act and the Regulations and of any listing exchange.(b)The financial statements shall include, as a minimum, Statement of Financial Position (Balance Sheet), a Statement of Comprehensive Income (Profit and Loss), a Statement in Change in Equity and a Cash Flow Statement (Source and Use of Funds) as well as a description of the accounting policies used and the relevant notes to the financial statements and a report on other legal requirements.(c)The requirements of this Schedule represent the minimum content required to be included in the reports of a real estate investment trust scheme. Compliance with the schedule does not remove or reduce the obligations of the trustee or the REIT manager, auditor or any other party under the laws of Kenya.(d)Information may be included by way of tables, charts or graphs where this assists in understanding.(e)Only photographs of assets actually owned by the REIT as at the date of the report may be included and should provide a fair representation of the state of repair and/ or stage of completion of the asset.(f)Where the reports of any experts, including valuers, or summaries of their reports are included then the report should also contain a letter of consent signed by the expert to the inclusion of the report or the summary in the report.(g)References in this Schedule to a REIT, D-REIT or I-REIT shall where the context permits also include a reference to an investee company or investee trust of the REIT, D-REIT or I-REIT as the case may be and the requirement to disclose or include information shall extend to the investee company or investee trust.2.COMPLIANCE WITH ACCOUNTING STANDARDSIn addition to meeting the requirements of this Schedule all reports and financial statements shall be prepared under and comply with the International Financial Reporting Standards and the International Auditing Standards or such other the accounting standards and auditing standards as are applying in Kenya from time to time.3.GENERAL REAL ESTATE INVESTMENT TRUST SCHEME INFORMATIONThe report shall include –(a)a table of contents and glossary of terms used in the reports;(b)the name of the real estate investment trust scheme;(c)the date of authorization of the scheme, the duration of the real estate investment trust and the type of scheme;(d)if the fund is an open fund, details of any restriction on applications for redemption;(e)date of any conversion from a D-REIT to an I-REIT or from a restricted I-REIT to an unrestricted I-REIT or conversion from an open to a closed fund or closed to open;(f)a statement of the number and type of units outstanding as at the balance date of the report and of the balance date for the financial statements;(g)information on whether the scheme is listed and details of the listing including, if trading is restricted;(h)a statement of any restriction on the transferability of units;(i)the scheme's objectives as at the balance date of the report and any changes since the date of the last report;(j)a structure diagram of the REIT which summarises the parties, relationship, roles of parties and material cash flows;(k)brief summary of the real estate assets (including development and construction projects) and other assets and purchase or sales contracts and of any material development or construction contracts entered into in the period covered by the report;(l)a statement as to whether or not the scheme has complied with Regulation 66 or Regulation 77 as regards the making completion of investment in at least one real estate asset within one hundred and eighty days and if not the action taken in accordance with the Regulations;(m)a brief statement of borrowings and financial arrangements entered into by the trustee on behalf of the scheme entered into in the period covered by the report and the outstanding as at the date of the report together with a calculation made pursuant to Regulation 71 or 81 on the gearing as at the date of the report;(n)table summarising distributions made for the lesser of 5 years or since the establishment of the scheme, the dates of such distributions and for each distribution the percentage of net, after tax, income distributed as provided for in the Regulations.The following is provided by way of example but will need to be adapted to the type of RHEIT, as assets and sources of income and the requirements under taxation legislation or of the Kenyan Revenue Authority, if any, from time-to-time.| SOURCES OF DISTRIBUTION** | 20XX Kshs | 20XX- Kshs |
| Rental income | | |
|---|
| For D-REIT or I-REIT converted from D-REIT Interest or similar income from provision of finance to purchases of developed real estate etc | | |
| Dividend income, including from wholly owned & controlled company | | |
| Distributions from other REIT scheme/s or collective investment schemes by source from each scheme | | |
| Realised capital gains (less losses) sale of real estate | | |
| Other realized capital gains (less losses) | | |
| Other income | | |
| SUBTOTAL | | |
| LESS** | | |
| Expenses & permitted deductions or transfers | | |
| Taxation | | |
| TOTAL POTENTIAL DISTRIBUTABLE INCOME | | |
| Distribution per unit in Kshs | | |
| Distribution as a % and compliance with Regulation 71, if an I-REIT | | |
| ** In additional items may be to be included to reflect the particular REIT's situation and/or to reflect e.g. unrealized losses brought forward or distributions made previous year's realized gains or unrealized gains. | | |
| No. of REIT securities holders | Level of holding | Totalholdings | % |
| | Less than 100 | | |
| | 100 to 1,000 | | |
| | 1,001 to 10,000 | | |
| | 10,001 to 100,000 | | |
| | 100,001 to less than 5% of number of units on issue as at the balance date of the financial statements included in the report | | |
| | Names of REIT securities holders and connected persons with holding of 5% and above of number of units on issue as at the balance date of the financial statements included in the report | | |
| |
| Promoter's holdings as per Regulations 74 and 84 | | | |
| Free float As required by Regulation 27 and 29 | | | |
| I-REIT Eligible Investments (Assets) Regulation65 | Regulation&MaximumLimit % | Regulation&MinimumLimit % | limit inSchemeDocument% | % as atBalanceDate | Highest.% levelDuringReportingPeriod | Date ofMostRecentValuation/s&Referenceto Page ofReportDetailingValuation |
| If the REIT is an Islamic REIT percentageof Shariah compliant total. If not 100% then for each category, set out below specify %that is Shariah compliant. | | | | | | |
|---|
| All direct eligible real estate(a) Freehold(b) l.easehold | | | | | | |
| All indirect eligible realestate(a) Freehold held through investeecompanies or investee trusts(b) Leasehold held through investeecompanies or invitee trusts | | | | | | |
| Income producing real estateRegulation 65(5)Minimum of 75% of TAV within 2years of authorization | | | | | | |
| Land and cost of constructionRegulation 70Maximum 15%TAV | | | | | | |
| Vacant land at acquisition cost & realestate not producing commercial return Regulation 70Maximum 10% of TVA | | | | | | |
| Cash, deposits, bonds andmoney market instrumentsRegulation 65(9)Maximum 5% to singleissuer, institution or members of group | | | | | | |
| Wholly owned and controlledcompany which conductsreal estate activitiesRegulation 65(10)Maximum of 10%TAVwith REIT securitiesholder consent | | | | | | |
| lncome producing assetsincluding listed sharesin Kenyan propertycompanies and units inKenyan I-REITS.Regulation 68(2)Maximum 10% of value of investmentand TAV at time of acquisition | | | | | | |
| For an I-REIT thathas converted from a D-REITMortgages or othersecured loans Etc.;authorized underRegulation 12 providedto purchasers of real estatedeveloped or constructedRegulation 12 | | | | | | |
| Other assets (eligible)include description | | | | | | |
| Other assets (not eligible)include description | | | | | | |
| If the REIT is an Islamic REIT percentage of Shariah compliant total. If not 100% then for each category, set out below specify %that is Shariah compliant. | | | | | |
|---|
| All direct eligible real estate(Regulation 2)(a) Freehold(b) l.easehold | | | | | |
| All indirect eligible real estate (Regulation 2)(a) Freehold held through investee companiesor investee trusts(b) Leasehold held through investee companies or invitee trusts | | | | | |
| Development & construction projectsRegulation 76(4) within one year of date of authorization minimum of 30%TAV in this or income producing or a combination | | | | | |
| Mortgages or other secured loans etc.;authorized under Regulation 12 provided to purchasers of real estate developed or constructed | | | | | |
| Vacant land | | | | | |
| Cash, deposits, bonds and money market instrumentsRegulation 76(8)Maximum 5% to single issuer, institution or members of group | | | | | |
| Wholly owned and controlled company conductingreal estate activitiesRegulation 76 (9)Maximum of 10%TAV with REITsecurities holder consent | | | | | |
| lncome producing assets including shares in Kenyan property companies and units in Kenyan REITS.Regulation 76(3)Maximum of 10% value of investment and TAV at time of acquisition | | | | | |
| Other assets (eligible) include description | | | | | |
| Other assets (not eligible) include description | | | | | |
| SOURCES OF DISTRIBUTION** | 20XX Kshs | 20XX- Kshs |
| Rental income | | |
|---|
| For D-REIT or I-REIT converted from D-REIT Interest or similar income from provision of finance to purchases of developed real estate etc | | |
| Dividend income, including from wholly owned & controlled company | | |
| Distributions from other REIT scheme/s or collective investment schemes by source from each scheme | | |
| Realised capital gains (less losses) sale of real estate | | |
| Other realized capital gains (less losses) | | |
| Other income | | |
| SUBTOTAL | | |
| LESS** | | |
| Expenses & permitted deductions or transfers | | |
| Taxation | | |
| TOTAL POTENTIAL DISTRIBUTABLE INCOME | | |
| Distribution per unit in Kshs | | |
| Distribution as a % and compliance with Regulation 71, if an I-REIT | | |
| ** In additional items may be to be included to reflect the particular REIT's situation and/or to reflect e.g. unrealized losses brought forward or distributions made previous year's realized gains or unrealized gains. | | |
SIXTH SCHEDULE
VALUATIONS
1.INDUSTRY STANDARDSSubject to the provisions of the Act, the Regulations and the requirements of this Schedule all valuations will be conducted in accordance with the standards and ethical code published and adopted by the Institution of Surveyors of Kenya and the Valuers Registration Board.A valuation summary prepared in accordance with this schedule may be included in any prospectus or offering memorandum but full copy of the valuation report must be retained and made be available for inspection by any REIT securities holders, potential or past investors in REIT securities and the Authority. No claim of confidentiality can be made in respect of a valuation report issued to the trustee or promoter of a REIT.2.VALUER'S DETAILS, SIGNING, DATING, CERTIFICATION AND AUTHENTICATION1.The report should set out prominently: the name(s), address(es), qualifications [and registration number(s)] and where applicable her/his organization.2.All valuation reports shall be signed by the valuer and dated and where the valuer is employed by a company, corporation or other body including a government organisation, department or authority shall also be signed by a director and the CEO of the company or corporation or the head of the organization, authority or department.A. To whom the report must be addressed1.All valuation reports must be addressed to the trustee and be expressed to be for the benefit of the trustee as trustee and all REIT securities holders in any real estate investment scheme or real estate investment trust in which the property is or becomes an asset.2.Where a valuation was obtained prior to the appointment of the trustee or is in respect of property already vested in the REIT then the valuation shall be refreshed and reissued and addressed to the trustee. In refreshing and reissuing a valuation the valuer must expressly consider and address the currency of its prior opinion and of the data, information, capitalisation a discount rates utilised and other considerations and assumptions.B. Opinion of value and disclaimers1.The valuer must express an opinion in the report as to the value in words as well as figures.2.Disclaimers, waivers and limitations on the valuer's opinion should not be so wide as to deprive the trustee, or REIT securities holders or other parties relying on the valuation for the benefit of the valuation.C. Basis of valuationThe basis of the valuation is to be market value.D. Compliance with the Act and RegulationsAll reports and the conduct of valuations shall comply with the requirements of the Act and the Regulations, including the requirement for physical inspection.E. Valuation approach and method of valuation - General Principles1.Valuations should be conducted using wherever possible at least two valuation methods in accordance with the valuation standards published or adopted by the Institution of Surveyors of Kenya and the valuers Registration Board for the valuation of real estate.2.The valuation achieved under each valuation method shall be disclosed in the valuation report.3.The valuer shall determine and use the most appropriate valuation based on the type of property, availability of relevant data, accuracy of data, relevancy, and other factors considered by the valuer to be relevant.4.The valuer shall include in its report a rationale for reconciling the values derived under the different methods and include a comparison by way of a table.5.In the case of an I-REIT the assumption will be that, unless the valuer for the reasons set out in its report believes that the method is inappropriate in the circumstances, one method of valuation will be the income comparison method.6.Valuations for assets other than real estate will reflect the industry practice to valuation of such assets and may require the involvement of a specialist valuer.F. Valuation approach and method of valuation1.The general approaches for the valuation of real estate currently include–a. Comparison approach;b. Cost approach; andc. Income capitalisation approach.2.The valuation report shall include an explanation of the valuation methods adopted and their appropriateness to the particular assets and the circumstances of the valuation.3.In applying the methods of valuation the valuer must ensure that the following are considered and disclosed in any valuation report—i. Appropriate and adequate comparables;ii. Details of the comparables including, identification and descriptions of the property(ies), date of sale, tenure and details of title, land and/or lettable areas, purchase price, breakdown of land and building values, names of vendor and purchaser, terms and conditions of sale (where available), current use, planning and zoning details and restrictions on use if any, details of any casements, tenancies;iii. Adjustments, if any, made by the valuer to ensure comparability so far as possible.i. The actual construction or tender cost, if available;ii. The cost and rates adopted for buildings structures and other improvements;iii. Adjustments made to reflect depreciation and obsolesce;iv. Adjustments, if any, made by the valuer to ensure comparability so far as possible; andv. Depreciation rates adopted and their bases;vi. A caution should be included as to the appropriateness of use of the cost method in that costs may not reflect value.3.Income Capitalisation Approachi. Investment method(A)Gross income and suitability of income used in the valuation where projected income is market derived;(B)Actual outgoings and other operating expenses where available for the past three years, projections should be supported and market derived;(C)Adequacy of maintenance and whether any major capital expenditure or increased maintenance is likely to be incurred in the next two years;(D)In the case of tenanted properties, schedules of existing tenancies, including names of tenants, term of tenancy (including options), rentals, services charges and obligation to contribute to outgoings;(E)In the case of tenanted properties, any connection of the tenant with the vendor or owner should be disclosed together with a comment as to whether the rentals and terms of the tenancy reflect the market;(F)In the case of tenanted properties, analysis of comparable data on rentals, incentives for tenants, outgoings, vacancies and capitalization rates and comparison with the property being valued; and(G)Market evidence to support the capitalisation and discount rates utilized which reflect the risk of the business, sector and location and other factors.ii. Residual method(A)The approved or submitted [development] plan together with details of approvals and consents obtained or applied for in relation to the development;(B)Consideration should be given to the reasonableness of the gross development value, timing of the development and construction period, in addition the valuer should liaise with the structural engineer and any project manager and if considered appropriate obtain additional expert input as to the cost of undertaking the development, and to obtain necessary and current market information;(C)The complexity of the development and construction and terms of the building contracts and prior performance of the builder on similar contracts particularly as regards cost overruns, disputes and timing for completion should be taken into account together with the potential impact on cash flows;(D)Market information to support projected supply, including supply in the pipeline or approved developments, rates of absorption and projected rents or sales prices and potential impact on input costs;(E)Past sales and performance of the REIT or the REIT manager or property manager in achieving sales for similar developments should be considered; and(F)The discount rate adopted must be market derived.iii. Profits method(A)Detailed workings showing an estimation of the annual revenue from the assets being acquired, operating expense, overheads and adjustments for depreciation and capital expenses;(B)Consideration should be given as to the adequacy of the level of maintenance; remaining useful life, obsolesce and provision for replacement of the assets;(C)Where the REIT is acquiring a business or entity rather than simply an asset then the valuer should also take account of any potential liabilities that may be assumed by the REIT in acquiring the business or entity including unpaid taxation liabilities, pension and other potential employee liabilities. Any potential liability should be disclosed and highlighted in the report and if relevant the valuer should obtain expert input prior to completing the report; and(D)Market evidence to support the capitalisation rates utilised which reflect the risk of the business, sector and location and other factors.iv. Discounted cash flow method(A)Detailed workings showing estimation of cash flows and the basis of estimation including comparison with market and supply and demand estimates, and(B)Market evidence to support the capitalisation and discount rates utilised which reflect the risk of the business, sector and location and other factors.v. Other methods(A)An explanation of the method and rationale used;(B)All data used must be substantiated by reference to market evidence.G. Minimum contents of valuation report1.General principles a. All valuation reports must be clear and not misleading and must disclose all material information and ensure that information disclosed is accurate and adequate. Where there is an inability to obtain accurate or adequate data then this fact must be clearly disclosed and a caution included.b. The report should clearly set out the analytical process, data and information used to arrive at the valuation.c. Where the valuation deviates from best practice then the reasons for this and the possible implications on the valuation should be disclosed.2.Contents of Reporta. All valuation reports must be addressed to the trustee and be expressed to be for the benefit of any and all REIT securities holders in any real estate investment scheme or real estate investment trust in which the property is or becomes an asset;b. Details of the instructions provided to the valuer, including any special conditions whether in writing or oral, should be clearly disclosed;c. The purpose of the valuation should be stated;d. The property(ies) should be clearly identified by reference to title particulars including, [lot number, title number] and postal address;e. The report should be dated;f. The basis of valuation and methods used, including a description of the method and comment on its appropriateness to the property and limitations or issues arising, where possible two methods should be included;g. The extent of and dates of inspection should be included together with the name of the person who conducted the inspection;h. The tenure or type of title together with the interest to be valued;i. Any encumbrances, easements or other rights or claims or restrictions on use;j. Zoning and approved uses and restrictions and building and planning consents and approvals (copies of which should be attached);k. A detailed description of the property including:i. Location and accessibility and include a plan;ii. Age, description, condition and state of repair of buildings and other plant, equipment, fixtures and fittings or moveable property included in the valuation;iii. Approvals of buildings, use and compliance as well as disclosure of any breaches of laws, regulations or conditions relating to the property or other assets;iv. Details of any recent material upgrading, refurbishing or renovations;v. Details of the neighbourhood and surrounding developments, availability of communications, services and utilities;vi. Details relevant to the sector and type of property, for example, for:(A)offices details of lettable space, comment on facilities, services, access and access to transport, parking, air-conditioning, standard of fit out and comparative suitability for purpose and market position;(B)factories details of factory buildings including e.g. design, construction, height, span, access to services, plant and equipment, location relative to access roads, railways ports etc.; and suitability for a range of activities or whether designed for specialist use only;(C)residential accommodation, type and sector of market, number of rooms, standard of finish, access to and connection to services, access to transport and schools, any limits on rental that can be charged or requirements to provide access to particular group of tenants or other limits on use or ability to sell;(D)other types or classifications of properties (for example, hospitals, warehouses, logistics, shopping centres, special purpose buildings, extractive industries such as quarries) information relevant to their attractiveness for their intended purpose, state of condition, comparison with norm for sector and location and competitiveness compliance for zoning and use and limits on changes and other factors that might influence value;(E)problems or issues, for example, encroachments, site stability, swampy or hill side, squatters, height restrictions, set-backs, flooding, noise and other detrimental aspects.vii. Details of prior registered dealings with the property for the past three years (or longer if the valuer considers relevant) including, date of dealing and if acquisition date of acquisition, cost of acquisition, expenditure subsequent to acquisition; parties involved in the transaction, use at the time of the transaction;viii. Photographs of properties, including comparative properties and of the location may be included;ix. Current market conditions and the possible impact of micro and macro-economic conditions and the impact of possible changes should be considered;x. The sources of information should be disclosed together with the opinions of experts.H. Use of experts1.The valuer may with the agreement of the trustee and the REIT manager engage experts to provide specific input to assist it with the preparation of a valuation. The appointment of experts and all reports of experts must state the purpose for which they were prepared, comply with the Act and Regulations.2.Where the valuation is to be included in a prospectus or offering memorandum then the expert must be named as an expert in that document and appropriate consents obtained.3.The reports of experts in addition to being addressed to the valuer must also be addressed to the trustee and be expressed to be for the benefit of any and all REIT securities holders in any real estate investment scheme or real estate investment trust in which the property is or becomes an asset.I. Valuation summary1.A valuation summary which is a condensed form of the valuation report, prepared for the specific purpose, may be included in a prospectus or offering document or any other document provided to REIT securities holders or any listing body.2.The valuation summary must clearly state that it is "a summary only of the valuation report which is available for inspection at the offices of the trustee and [include other designated addresses or on the internet address, if any].3.The summary must be clear, signed and dated and contain adequate and accurate information and not be misleading to REIT securities holders or potential investors in REIT securities or to their advisers.J. Significant or material changesWhere a valuer has prepared a report or valuation summary and the valuer becomes aware of any significant or material changes affecting the valuation opinion, report or valuation summary at any time prior to:a. the issue of the prospectus or offering memorandum;b. the issue of REIT securities pursuant to the prospectus or offering memorandum; or c. REIT securities holders voting on any resolution for which the report was prepared, then the valuer must notify the trustee, the REIT manager and the Authority of the fact and the impact or potential impact on his report and opinion on value and shall withdraw his report and consent.K. AppendicesMaps, plans, detailed workings, expert's opinions, market studies, photographs and additional details may be included as Appendices.SEVENTH SCHEDULE
MEETING OF HOLDERS OF REIT SECURITIES
1.GENERALIn addition to provisions for meetings of REIT Security holders provided for in the scheme documents, the trustee and the REIT manager shall convene—(a)an annual meeting of REIT securities holders to be held at least fourteen days and not more than twenty eight days after the date of circulation of the annual report;(b)whenever required by the Act, these Regulations or the scheme documents;(c)whenever the Trustee or the REIT manager determines that a meeting is desirable;(d)where directed to do so by the Authority where the Authority is of the opinion that the calling of a meeting is desirable; or(e)upon receiving a written request that a meeting be called for the propose specified in the request by not less than fifty REIT securities holders who holds not less than ten percent of the voting REIT securities in the real estate investment trust.2.NOTICE OF MEETINGS1.At least a notice of fourteen days shall be given to the Authority, the auditor and each holder of REIT Securities of all meetings.2.The notice of the meeting shall include—(a)copies of any reports to be considered or which provide the foundation for any resolution and a copy of any resolution proposed to be put at the meeting;(b)where the meeting is convened pursuant to a request of holders of REIT Securities or the Authority, a copy of the request and the terms of any resolution proposed and of all reports or valuations that are required to be prepared or provided to holders;(c)where the meeting is convened as a consequence of a direction received from the Authority a copy of the direction and the terms of any resolution proposed; and(d)a statement that a REIT securities holder is entitled to attend the meeting in person or by executing the notice of appointment attached to the notice calling the meeting is entitled to appoint a proxy who need not be a REIT securities holder.3.CHAIRPERSON AND QUORUM1.Where the meeting is convened by the Trustee or the REIT Manager then the meeting shall be chaired by a representative of the Trustee.2.Where the meeting is convened at the request of holders of REIT Securities or the direction of the Authority then the meeting shall be chaired by a person elected by holders of the REIT Securities present at the meeting of if no such appointment is made then by the nominee of the Trustee.3.The quorum of a meeting of holders of REIT Securities shall be five (5) REIT securities holders present in person or by proxy except in the case of a meeting to pass a special resolution in such case the quorum shall be a minimum of five REIT securities holders present in person or by proxy representing the holders of at least twenty five percent of the REIT securities issued at the date of the calling of the meeting.4.In the event that there is no quorum for any meeting, then the meeting shall be adjourned to a date determined by the Trustee which shall not be more than fourteen days from the date of the adjourned meeting. A notice of the adjourned meeting shall be given to all the holders of REIT Securities, the auditor and the Authority.5.In the event that there is no quorum for any adjourned meeting, then the meeting may proceed notwithstanding the lack of a quorum.The REIT Manager or the holdings of REIT securities by the REIT Manager or any party connected to them shall not be included for the purposes of determining whether a quorum is present irrespective of by whom the meeting was convened or the matter before the meeting.4.RESOLUTIONSExcept where a Special resolution is required by or permitted by the Act, these Regulations of the scheme documents, all resolutions may be passed by a simple majority and a copy of all resolutions passed at any meeting shall he filed with the Authority.5.VOTING RIGHTS1.The rights of any REIT securities holder to vote at any meeting are subject to any provision of the Act or these Regulations which limit the capacity of the REIT securities holder to vote on any resolution or to any restrictions on voting by the promoter, REIT Manager, REIT property manager, auditor or valuer or any party connected to them in the Act, these Regulations or the scheme documents.2.On any matter in respect of which a vote is taken, then any REIT securities holder present in person or by proxy shall be entitled to one vote on a show of hands.3.A poll may be demanded on any vote or be required by the Chairperson of the meeting.In the case of a poll then–(a)votes may be given either personally or by proxy; and(b)every REIT securities holder shall have one vote for each vote held by the REIT securities holder.6.ADJOURNMENT AND MINUTES1.The Chairperson may adjourn any meeting at which a quorum is present with the consent of the meeting and must adjourn if directed by the meeting.2.The Trustee shall be responsible for ensuring that–a) minutes are prepared within seven days for all meetings of REIT securities holders and that the minutes record the proceedings and all resolutions put to the meeting and the results of any votes and that the minutes are presented to the Chairperson for signing;b) any minutes presented to the Chairperson shall be signed within seven days of presentation and recorded in the minute book and a signed copy provided to REIT Manager:Provided that–(i)if the Chairperson is not satisfied that the minutes prepared are correct and on request, these are not corrected by the Trustee, then the Chairperson shall be responsible for amending the draft minutes and signing a corrected copy which shall be recorded in the Minute book; and(ii)a signed copy of the corrected minutes are forwarded to the Trustee, the REIT Manager and the Authority.EIGHTH SCHEDULE
FORM
| FORM 3 |
| FORM FOR APPLICATION FOR LICENCE AS REIT TRUSTEE OR REIT MANAGERTHE CAPITAL MARKETS ACT(CAP. 485A)THE CAPITAL MARKETS (REAL ESTATE INVESTMENT TRUSTS)(COLLECTIVE INVESTMENT SCHEMES) REGULATIONS, 2012APPLICATION FORMAPPLICATION FOR A LICENCE/ RENEWAL OF LICENCE TO CONDUCT THE BUSINESS OF A REIT MANAGER OR REIT TRUSTEE |
| ________________________________________________________________________________ |
| Application is made for REIT Manager/ REIT Trustee (tick as appropriate licence/ renewal of licence (delete where inapplicable) under the Capital Markets (Collective Investment Schemes) (Real Estate Investment Trusts) Regulations, 2012 and the following statements are made in respect thereof: |
| Note- |
| If space is insufficient to provide details, please attach annexure(s). Any annexure(s) should be identified as such and signed by the signatory of this application. |
| Information provided should be as at the date of the application or renewal. |
| 1. Name of company ......................................................................... Limited |
| 2. Registered office ......................................................................................................... |
| 3. Date of incorporation ................................................................................................ |
| 4. Address ....................................................................................................................... |
| 5. E-mail ........................................................................................................................... |
| 6. Location, address and telephone number of principal office .......................................................................................................................................................... |
| 7. Location, address and telephone number of branch officers ........................................................................................................................................................... |
| 8. Details of capital structure:(a) Nominal capital (Kshs.) .......................................................................................(b) Number of shares ................................................................................................(c) Paid-up capital (Kshs) ......................................................................................... |
| 9. Shareholders (please attach a list) |
| Name | Address & telephone number | Number of shares Held |
| 10(a) Directors (please attach a list) |
| Name | Identity card/ Passport number | Date of Appointment | Date of birth | Permanent address & telephone number | Academic or Professional qualification | Number Of shares held in the company |
| (b) Secretary |
| Name ........................................................... |
| Address .................................................... |
| |
| Institute of Certified Secretaries of Kenya Registration No. ..................................................... |
| |
| (c) Chief executive and other key personnel |
| Name | Identity Card/Passport number | Date of Appointment | Date of birth | Permanent address & telephone number | Academic or Professional qualification | Number of shares held the company |
| | | | | | | |
| 11. Particulars of other directorship(s) of the directors and secretary. .............................................................................................................................................................. |
| 12. Particulars of shares held by directors or secretary in other companies ................................................................................................................................................................ |
| 13. Has the applicant or any of its directors, secretary or members of senior management at any time been placed under receivership, declared bankrupt, or compounded with or made an assignment for the benefit of his creditors, in Kenya or elsewhere? Yes/No.If 'yes' give details ....................................................................................................................... |
| 14. Has any director, secretary or senior management of the applicant been a director of a company that has been: |
| (a) denied any licence or approval under the Capital Markets Act or equivalent legislation in any other jurisdiction: Yes/No. If Yes, give details. ..................................................................................................................................................... |
| (b) a director of a company providing banking, insurance, financial or investment advisory services whose licence has been revoked by the appropriate authority? Yes/No. If Yes, give details. .......................................................................................................................................... |
| (c) subjected to any form of disciplinary action by any professional body of which the applicant or any of its director was a member? Yes/No. If yes, give details. ...................................................................................................................................................... |
| 15. Has any court ever found that the applicant, or a person associated with the applicant was involved in a violation of the Capital Markets Act or Regulations thereunder, or equivalent law outside Kenya? Yes / No. If 'yes', give details. ................................................................................................................................................... |
| 16. Is the applicant and/or a person associated with the applicant now the subject of any proceeding that could result in a 'yes' answer to the above question ( 15)? Yes/No. If 'yes,', give details. ........................................................................................................................................... |
| 17 (l) Is the applicant, or any shareholder, director or the secretary of the applicant, a member or director of a member company of any securities exchange? Yes/ No. If 'yes', give details. ................................................................................................................................................... |
| (2) Have any of the above persons been -(a) refused membership of, any securities organization? Yes / No. If 'yes', give details .......................................................................................................................................................... |
| (b) expelled from or suspended from trading on or membership of any securities organization? Yes/No. If 'yes' give details ....................................................................................................................................................... |
| (c ) subjected to any other form of disciplinary action by any stock/securities exchange'? Yes/No. If 'yes', give details. ............................................................................................................................................................ |
| 18. Business references: |
| |
| Name | Address | Telephone number (s) | Occupation |
|---|
| 19. One bank reference, where the applicant is a bank the reference shall be given by another bank independent of the applicant |
| |
| 20.Profile of the chief executive and key employees in the applicant company: |
| Name | Post | Qualifications | Experience |
| 21. List the office facilities of the applicant ..................................................................................................................................................... |
| 22. State the exact nature of the activity to be carried on which obliges the applicant to apply for a licence from the Capital Markets Authority .................................................................................................................................................. |
| 23. Any other additional information considered relevant to this application: ................................................................................................................................................ |
| we .................................(Director), .......................... (Director) and ............................ (Secretary) declare that all the information given in this application and in the attached documents is true and correct. |
| Dated this .................. day of .................................... 20 ............................ |
| Signed: |
| ....................................................................... ) Director |
| ....................................................................... ) Director |
| ....................................................................... ) Director |
| Note: |
| l. The following shall be submitted with the application for a licence - |
| (a) memorandum and articles of association; |
| (b) certificate of incorporation; |
| (c) business plan complying with the requirements of regulation'126(l)(d) of the Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2012; |
| (d) a statement of the un-audited accounts for the period of accounting year ending not earlier than six months prior to the date of application and audited annual accounts for the preceding two years (in the case of application of licence), management accounts upto the 30th November and audited annual accounts for the preceding year (in the case of renewal of licence); |
| (e) a declaration by the directors as to whether after due enquiry by them in relation to the interval between the date to which the-last accounts have been made and a date not earlier than fourteen days before the date of the application - |
| (i) the business of the company has, in their opinion, been satisfactorily maintained; |
| (ii) there have, in their opinion, arisen any circumstances adversely affecting the company's trading or value of its assets; |
| (iii) there are any contingent liabilities by reason of any guarantees given by the company or any of its subsidiaries; |
| (iv) there are, since the last annual accounts, any changes in published reserves or any unusual factors affecting the profit of the company or any of its subsidiaries; |
| (f) a declaration by persons authorized as prescribed to accompany the application form; |
| (g) an application fee of Kshs. 2,500. |
NINTH SCHEDULE
FEES
Part I – APPLICATION, AUTHORIZATION OF SCHEME, APPROVAL OF PROSPECTUS OF OFFERING MEMORANDUM, CONVERSION AND ANNUAL FEES
| | | FeeKshs or percent |
|---|
| (a) | Application fee or application renewal fee for authorization of real estate investment trust scheme | 2,500 |
| (b) | Application fee for REIT conversion | 2,500 |
| (c) | Authorization or annual fee of real estate investment trust Scheme | 150,000 |
| (d) | Approval fee of prospectus | 0.15% of value of offer of REIT securities subject to a maximum of 10,000,000 |
| (e) | Approval fee of offering Memorandum | 0.0375% of value of offer of REIT securities subject to a maximum of 2,500,000 |
| (f) | Approval fee for conversion of a D-REIT to an unrestricted I-REIT | 0.1125% of value of offer of security and a maximum of 7,500,000 |
| (g) | Approval fee for conversion of a D-REIT to a restricted I-REIT | 150,000 |
| (h) | Approval fee for conversion from restricted I-REIT to unrestricted I-REIT | 0.1125% of value of offer of security and a maximum of 7,500,000 |
| (i) | Approval fee for conversion from unrestricted I-REIT to restricted I-REIT | 150,000 |
| (j) | Public inspection of documents. | 1,500 |
Part II – TRUSTEE AND REIT MANAGER LICENCE AND RENEWAL FEES
| | License and renewal fee | FeeKshs orpercentage |
|---|
| (a) | Trustee for a REIT | 200,000 |
| (b) | REIT Manager | 100,000 |
