Property fund ILAM Fahari I-Reit is set to take a Sh63.6 million loss from the sale of Highway House, a three-storey commercial building in Nairobi.
The fund says it entered into a deal to sell the property on Pokomo Road, off Mombasa Road, in May this year for a total consideration of Sh45.1 million.
Fahari purchased the property at Sh108.7 million in June 2016.
"The total sale consideration is Sh45.1 million with a completion date expected to be three months after the date of signing the agreement subject to fulfilment of all conditions precedent," the fund says in its interim annual report.
“The property has been vacant since April 2018 and the management together with the trustee considered selling the property in line with the Reit strategic initiatives."
The property sits on a land parcel measuring 0.1089 of an acre and had an unexpired leasehold term of 33 years as of June 30.
It has a gross lettable area of 7,638 square feet with ample covered parking bays. In the six months to June, Fahari valued Highway House and Bay Holdings- another property on sale at a combined at Sh200.4 million and listed both as property assets as held for sale.
Unlike the Highway House property, Bay Holdings is a fully occupied property in Nairobi’s industrial area which has a gross lettable area of 33,265 square feet and was acquired at Sh216.1 million in June 2016.
Fahari’s investment properties were revalued by Jones Lang LaSelle Kenya Limited as at December 31, 2022, with Bay Holdings being valued at Sh170.4 million while Highway House was valued at Sh30 million.
This implies that the property fund will likely sell both assets at a loss to the buying price even as the proposed sale value of Highway House stands at a premium of its most recent valuation.
Greenspan Mall is Fahari’s largest property based on its valuation of Sh2.2 billion.
