Finland-based Taaleri Private Equity Funds Group will provide further development capital to Cytonn Investments that will be deployed to the Kenyan real estate sector through Cytonn Real Estate, an affiliate whose deal pipeline now stands at KES 56bn.

Elizabeth Nkukuu, Cytonn’s Chief Investments Officer, said Taaleri has previously financed over KES 2bn of Cytonn’s real estate developments.

“We are glad that they have increased their funding commitment, a testament to our capabilities in fund-raising, as well as being able to demonstrating exits for our institutional investors,” she said.

“We are glad that in Taaleri, we do not only have a financier but also a partner who is walking the journey with us as we continue to create wealth for our clients, build safe neighborhoods for families and create employment opportunities for Kenyans,” she added.

Cytonn Real Estate has been undertaking a number of real estate projects in Kenya, with an 85% focus towards the low to mid-income segment of the housing market.

Last year, Cytonn broke ground for Amara Ridge in Karen, while the 400-unit lifestyle community in Ruaka, The Alma, which will cost KES 2.5bn as well as the gated community in Karen, Situ Village, which will cost KES 4bn, will be breaking ground during the first half of the year.

Looking at the returns from various asset classes over the last 5 years, research has consistently shown that real estate has delivered the highest returns and is poised to continue to do so over the next 5 to 10 years given the strong economic growth, demand for affordable housing, scarcity of high quality commercial space, and the strategic location of the Kenya as a regional hub.

Taaleri, which recently re-branded from Taaleritehdas PLC, launched its first Africa fund in 2014, following a success of series of European real estate funds.

The firm manages $5bn of investments across asset classes globally.

In addition to Kenya, the fund has a number of real estate investments in Rwanda and Mozambique.

Antti-Jussi Ahveninen, Head of Africa at Taaleri, said: “Our increased commitment towards funding Cytonn’s real estate developments highlights our goal of creating long-term and sustainable partnerships in the Eastern African region.”

“Institutional partners such as Cytonn, who have demonstrated investor focus, world-class development procedures, and the ability to exit, are key partners for global institutional investors such as Taaleri as we look to continue investing in the region,” he said.

“The increased commitment works well for everyone, as Taaleri is able to allocate capital towards institutional real estate developments with attractive structures, while Cytonn has a faster avenue for execution of their KES 56bn deal pipeline,” he added.