Cytonn Investments, a leading real estate developer has signed a partnership agreement and the purchase of 25 percent stake in the real estate company Superior Homes worth KSh 1billion with an option for further purchase over the near term.
Speaking to the media on Tuesday during the announcement, Edwin H. Dande, Cytonn’s Managing Partner and Chief Executive Officer said it was an exciting time for Superior homes and Cytonn Investments.
The 25 percent stake investment in Superior Homes is in line with Cytonn’s strategy of connecting capital from global and institutional investors, such as Taaleri of Finland who are Cytonn’s development financing partners, with attractive returns in real estate, supplied by world class development capability such as Superior Homes.
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“The deal is complementary and compelling. In Superior Homes, Cytonn gets a partner that has a strong track record in master-planned developments and also construction capabilities, and in Cytonn, Superior Homes gets a partner that has a strong track record in structuring real estate investment products, and they also complement our development affiliates. Above all is our shared values, operating principles and vision,” said Dande.
“Beyond the acquisition, the bigger deal here is the partnership. Together we are going to move faster and more significantly in providing housing for families, create jobs, grow the economy and uplift the standards of living,” he added.
“Superior Homes is a leading real estate developer in Kenya, most notably known for being a pioneer in the execution of master-planned gated communities in the Nairobi Metropolis, namely the Greenpark Estate in Athi River” said Elizabeth N. Nkukuu, CFA, Cytonn’s Chief Investment Officer. “More than a gated community, Superior Homes has established a community and neighbourhood presence in their developments, which have provided secure, institutional grade and lifestyle living. This enables us to provide to our investors yet another segment of exposure in real estate,” added Elizabeth.
Ian Henderson, Superior Homes CEO says, “This is a mutually beneficial partnership.”
“After a strong 10-year track record, it was important to tie up with a partner with shared values, aspirations and complementary capabilities. Through this partnership and the investment, we shall work to grow our deal pipeline, drive the company towards listing on the Nairobi Securities Exchange, during the course of 2017,” said Henderson.
“Present it is a family business. We want to list for purposes of growth and to employ more Kenyans.”
“We anticipate to offload 15 percent shares. For investors, they should not be worried at the current performance of the NSE. It is the best time to buy,” says Henderson.
For Cytonn, when they list, “It will only make it better. It will create more liquidity in the market,” says Elizabeth.
The series of transactions as structured values Superior Homes at about Kshs. 4 billion; hence valuing the stake of Cytonn, upon successful completion of the series of transactions, at about Kshs. 1 billion upon the successful completion of the transaction.
The transaction advisors to Superior Homes were I&M Burbidge Capital, and the legal advisors were Bowmans.
Transaction advisors to Cytonn Investments were Cytonn Advisory, legal advisors were Taibjee and Bhalla, and accountant was Grant Thornton.