REIT Manager Licensing in Kenya: CMA Requirements

A Real Estate Investment Trust (REIT) cannot operate without a licensed REIT manager appointed to run it. REIT manager licensing in Kenya is a distinct CMA licence category from the REIT scheme itself, and it is easy to conflate with general real estate fund management. This article deals only with the manager licence, not the separate process of authorising the REIT scheme, and sets out what the licence specifically requires.

The Governing Regulations

REIT managers are licensed under Part XXVIII of the Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2013 (Legal Notice 116 of 2013, as amended). This is a different instrument from the Capital Markets (Licensing Requirements) (General) Regulations, 2025 (Legal Notice 197 of 2025) that governs stockbrokers, investment banks and most other CMA intermediaries, which is why the application form and some requirements differ in detail even though the governance expectations are broadly similar.

Documentation Requirements

Under regulation 124, an application to operate as a REIT manager or trustee is made in duplicate on Form 3 set out in the Eighth Schedule. Regulation 125 requires it to be accompanied by the certificate of incorporation, the memorandum and articles of association, unaudited accounts for the period ending not earlier than six months before the application and audited accounts for the preceding two years (or, for a newer entity, an opening balance sheet and an auditor’s certification of share capital), and a business plan covering the management structure, directors, shareholding structure and operating arrangements. The business plan must also address the proposed premises and staff and name the independent auditor.

Each director, chief executive officer or manager of a REIT manager must be fit and proper. An applicant that is a bank or insurance company must also submit a no-objection letter from its primary regulator. The prescribed fees are tied to the licence application, and applicants should confirm the amounts with the CMA before filing.

Capital Requirements

The Regulations set two capital tests for a REIT manager:

• Regulation 55(2)(b) requires a REIT manager to be a company incorporated in Kenya with minimum paid-up capital of ten million shillings.
• Regulation 126 requires shareholders’ funds (paid-up capital and reserves) not to fall below ten million shillings at any time during the licence period, paid-up capital to be unimpaired and not advanced to directors or associates, and liquid capital of five million shillings or eight per cent of total liabilities, whichever is higher.

Those figures are well below the Kshs. 50,000,000 required of a stockbroker or the Kshs. 150,000,000 required of an investment bank under the 2025 Regulations.

Appointment by the Trustee

Regulation 55(1) provides that every REIT manager is appointed by the trustee with the prior approval of the Authority. A REIT manager may not manage more than one REIT scheme unless it has applied for and obtained the Authority’s approval. Capital and licensing are therefore only part of the picture; the manager’s appointment and terms are also scrutinised.

Business Plan and Governance

The application requires a business plan and details of management structure, along with the governance standards the CMA applies across licensed intermediaries, including an independent board, qualified finance and audit personnel, risk and compliance functions, a board charter and a risk management framework. Shareholding disclosure, including ultimate beneficial ownership of corporate shareholders, is expected. Applicants should map their board and staffing against the CMA’s current corporate governance rules and checklist before filing.

The applicant must describe its operating systems and show that its premises and staff are suitable for REIT management. This operational emphasis is distinctive, because a REIT manager is directly responsible for day-to-day asset and portfolio management decisions, not simply oversight.

I-REIT and D-REIT: Why the Manager’s Scope Needs to Match the Trust Type

The Regulations distinguish between an Income Real Estate Investment Trust (I-REIT), which invests in completed, income-generating property, and a Development Real Estate Investment Trust (D-REIT), which invests in property development. A manager’s competencies, staffing and systems should match the trust type. A team built around completed income-producing assets is not automatically well positioned to manage a development-stage REIT, which brings construction risk, contractor management and project financing considerations. A mismatch between the manager’s demonstrated track record and the trust type is the kind of substantive issue the CMA is likely to probe, in addition to the numeric checklist items.

The Manager’s Relationship With the Trustee

A REIT structure involves at least three parties: the REIT scheme, a licensed REIT manager responsible for investment and operational decisions, and a trustee responsible for safeguarding scheme assets and overseeing the manager for unit holders. The manager is assessed as one part of a governance system designed to protect investors. As a matter of good structuring, the manager and trustee should be genuinely independent of one another, since the trustee’s supervisory role is meant to be a real check on the manager.

REIT Manager Versus the REIT Structure Itself

Authorising a REIT scheme and licensing the entity that manages it are two separate steps, and a promoter needs both before a REIT can launch. A common structuring mistake is to treat REIT manager licensing as a formality that follows once the scheme is approved. In practice the manager’s own capital, governance and operational infrastructure must independently satisfy the CMA.

How This Fits the Wider Landscape

For the broader real estate investment structuring picture, including how REITs compare to joint ventures and special purpose vehicles, see our guide to real estate investment structures in Kenya. For comparison with other intermediaries, see our guides to investment bank licensing, stockbroker licensing and our overview of Capital Markets Authority licensing in Kenya.