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Real Estate
  • How does someone save when they invest in an off plan compared to buying a ready built house?

    Investing off plan means that an investor purchases property before completion. Off plans are generally driven by the high real estate prices and the longevity of time taken to guarantee delivery of completed units, given the low supply rates of real estate units despite consistently increasing prices. Off plans have become increasingly popular since prices of sold property are lower than market prices. Prices can be upto 50% lower. The sale procedure for an off plan development commences with signing of three documents namely: the letter of offer, the reservation form and the sale agreement. It is usually beneficial to buy real estate off plan since:

    1. Investor benefits from potential high capital gains – Since the investors are acquiring a future asset at current prices and hence in a peaking market buyer attains capital gains and significant margins upon completion.
    2. Flexible payment plans – since all that is needed is a deposit to a tune of 10 to 20% of purchase prices, with the rest of the amount being paid in flexible instalments or upon completion. This allows individuals without adequate finances to acquire a stake in real estate
    3. Preference – Buyers have the concession of choosing the most viable locations and can get houses in line with preferences as opposed to buying a complete house where investors are compelled to settle for left over locations.

    Off plan investment enhances flexibility as it allows investors to make piece meal payments, this allows the investor to save as it reduces balances to be paid upon completion. Moreover, investors can agree with the seller on how balance will be settled and payments can be made as construction continues this allows for better planning and saving

    Investing off plan means that an investor purchases property before completion. Off plans are generally driven by the high real estate prices and the longevity of time taken to guarantee delivery of completed units, given the low supply rates of real estate units despite consistently increasing prices. Off plans have become increasingly popular since prices of sold property are lower than market prices. Prices can be upto 50% lower. The sale procedure for an off plan development commences with signing of three documents namely: the letter of offer, the reservation form and the sale agreement. It is usually beneficial to buy real estate off plan since:

    1. Investor benefits from potential high capital gains – Since the investors are acquiring a future asset at current prices and hence in a peaking market buyer attains capital gains and significant margins upon completion.
    2. Flexible payment plans – since all that is needed is a deposit to a tune of 10 to 20% of purchase prices, with the rest of the amount being paid in flexible instalments or upon completion. This allows individuals without adequate finances to acquire a stake in real estate
    3. Preference – Buyers have the concession of choosing the most viable locations and can get houses in line with preferences as opposed to buying a complete house where investors are compelled to settle for left over locations.

    Off plan investment enhances flexibility as it allows investors to make piece meal payments, this allows the investor to save as it reduces balances to be paid upon completion. Moreover, investors can agree with the seller on how balance will be settled and payments can be made as construction continues this allows for better planning and saving

  • Are there any structural issues in your projects?

    There are no structural issues in our projects.  We have an internal Quality Control and Quality Assurance team that visits the sites on a daily basis to vet and ensure the projects meet all the standards. We have hired the best contractors in the market that oversee the development of this sites. To clear any doubt you can also visit any of the sites from the link below http://crm.cytonn.com/clientevents/slug/weekly_real_estate_site_visit

  • What is the process of a site visit to any of Cytonn’s developments?
  • What is the status of the Newtown project? In terms of ground breaking and Title Deeds?

    Newtown is a masterplan project that will take between 10 to 15 years, which is a standard for projects of such magnitude. The land is being acquired through an extended probate process and that takes time, but we have no doubt that we shall complete. Once the probate process is concluded and transfer done, the title deeds will be issued. We are also in the process of engaging the relevant authorities to build the 10km road connecting the town to the main highway (Mombasa Road), and this too shall take time. Until the transfer issue is resolved we have slowed down on the development. However, we continue to sell it for investors who are taking a very long-term investment horizon that shall not provide liquidity now, but shall provide above average return for the long-term. The concept viability is subject to getting the road however, we are progressing uses that are not dependent on roads such as education.

  • Are there plans to have a project around the Lake Naivasha/Mombasa region?

    Currently, we are not actively pursuing Lake Naivasha and the Mombasa region since they are not part of our focus areas. However, we keep on looking at the market to find out the most viable areas to invest, this means that we consistently maintain an open perspective on all areas.

  • How different are we from other developers in the market?

    Real Estate developers are entities involved in the construction, development and the purchase of property after which they sell as improved land to willing buyers. Cytonn Real Estate is a development firm that aims at developing institutional grade real estate. The firm is well equipped with a team of extensively experienced individuals in the field of real estate who work towards delivering quality as well as aspirational real estate developments that encourages community living. Unlike other developers who focus on data collection and analysis, we go an extra mile and identify existing market niches, inform concept development and enhance market knowledge. This requires adept market understanding that facilitates opportunity identification and manipulation. Our diverse networks that span both locally and globally enable us bring together land owners through Joint Ventures (JVs) and tap into capital. We also encourage investor participation making our clients attain what matters most to them through:

    1. The real estate backed fixed income notes that offer a secure and fixed rate of return over an agreed period of time
    2. The purchase of completed developments in a project through varied payment methodologies for instance cash terms, instalment price, the mortgage option and the zero deposit that gives client leeway to select the most comfortable payment plan for them based on income and cash-flows.
  • What happens if a project that had a larger allocation of funds develops issues and needs to close?

    We focus on diversification of our real estate projects, whose concepts are well researched, conveyancing done and peer reviewed. This are also pre-sold before ground breaking. Therefore, probability if close is fairly low.

Corporate
  • What is Open to Talk

    Cytonn “Open to Talk” initiative primary purpose is to facilitate an open and transparent engagement with all our stakeholders about the social media challenges we have faced. You can view our responses on the link below https://www.cytonn.com/open-to-talk

  • What is the process of being a supplier in Cytonn and do I have preference if I invest?

    Send your business profile to procurement@cytonn.com one of the team members will reach out within 2 hours and take them through the procurement process. There is no preference given if you are an investor.

  • Cytonn’s standard position and response on any allegation i.e. do we have a standard response?

    We have the open to talk platform that we use to address all the concerns. You can view our responses on the link below https://www.cytonn.com/open-to-talk

  • Is the staff attrition rate high?

    Cytonn through CYLP prepares staff for the market - both at Cytonn and externally. Some staff will leave at different levels of their careers at Cytonn. Second to note is that the Cytonn culture is not a fit for everyone. The fast pace and long working hours especially, make some people leave when they can't keep up. Every successful business has been built through hard work and that is our culture. It’s common for investment and professional services organizations to have high attrition. It’s all the design for our business, to be bottom heavy, so we expect people to leave however, our regrettable attrition rate is low, at 10 percent.

  • Is Cytonn a bank?

    We are not regulated by the Central Bank of Kenya and are not licensed to take deposits from the public. As discussed above, Cytonn HYS is an investment product, not a banking product. Our investment solutions are privately offered investments through the private offers regulatory framework

Cytonn High Yield Solutions
  • Who regulates CHYS?

    Cytonn HYS is currently a privately offered solution, offered exclusively to high net worth individuals and is “self-regulated” through its own governance structure of the board, custodian, auditor and principal partner, Cytonn Investments, that is rated by Global Credit Rating (GCR) a credit rating agency

  • How are you able to offer 18% yet banks offering much lower rates?

    Cytonn HYS rate is priced off the loan price market, not off the money markets. Because the funds are mainly used for real estate development, which is mainly sold off plan, the appropriate benchmark is the cost of loans, and the typical real estate developer accesses bank financing at 14% - 18% per annum

  • How come no one else is offering these rates?

    Offering higher than average rates requires a comprehensive platform; the Investment Manager has to have the asset yield that can support the return. The Promoter has to have an investment function that interfaces with investors (Cytonn Investments), and a yield generating function that generates the yield (Cytonn Real Estate). Cytonn is the only brand in this market that has coupled up investment management and real estate development onto one platform. A promoter cannot offer high returns without a high yielding asset to support the return

  • Why does my bank or relationship manager talk badly about Cytonn HYS?

    First, it is possible that RMs don’t understand how structured notes work. Secondly, Cytonn HYS offers a very competitive private alternative to fixed-term bank deposits, hence can be construed to be in direct competition. It is not the first time established players have opposed new products. The banking industry was hesitant when M-Pesa was introduced 10-years ago as a new means for money transfer, but today M-Pesa is the leading means to transact cash. Taxi owners and drivers opposed the introduction of Uber, but today Uber is the most used means of cabbing in Nairobi. And established banks ridiculed the transformation of Equity Bank from a building society to a commercial bank, and today it is the largest bank by market capitalization. History is littered with examples of established order talking down innovation and emerging technologies that are perceived as threatening

  • Who does Cytonn HYS target?

    Cytonn HYS targets high net worth individuals and institutions with the capacity to understand the risks and complexity of the investments. They have to go through a prequalification process and be admitted by an existing Partner into the Partnership. It is privately offered

  • How come other fund managers at some point stopped issuing HYS?

    HYS is an unregulated investment solution offered through private channels. Our understanding is that Fund Managers, themselves CMA regulated entities, were issuing HYS in contravention of Section 26 (1) (b) of the Capital Markets Act, which prohibits carrying out “any activity outside the scope of the licensed or approved activities”. The placement has to be structured to conform to the private offers regulations. It is our understanding that other competitors are restructuring their offerings

  • What is the profile of investors in Cytonn HYS?

    Cytonn HYS investors include local high net worth individuals, Kenyans and other East Africans in the Diaspora, local institutions such as SACCOs and chamas, as well as international institutional investors. The leading investor is Taaleri, a USD 7 billion investor based in Finland, whose representative also sits on the Board

  • Is CHYS a Ponzi Scheme?

    A Ponzi scheme involves offering high returns that are not supported by any underlying economic activity or enterprise. Essentially returns are paid out of cash flows from new investors. Any offer of above market returns has to be able to demonstrate the actual assets / underlying economic activity that supports the returns. In the case of Cytonn HYS, the returns are supported by the 10 ongoing and largely pre sold developments

  • Why did 'Cytonn CMS' change to 'Cytonn HYS'?

    Following the licensing of our asset management affiliate, Cytonn Asset Managers Limited, we have been engaging with the regulator to bring certain products within the regulatory ambit.

    As part of the process, we renamed Cytonn Cash Management Solutions LLP, (Cytonn CMS) to Cytonn High Yield Solutions LLP, (Cytonn HYS) effective 9th July 2018.

    The key reason for the change is to have a name that is consistent with the underlying asset class, which is high yielding real estate that supports the high yield returns. Cytonn HYS typically invests around 70% of the fund into investment grade real estate.

  • What are the requirements for joining HYS?

    Fill in the Investment Agreement Form and attach the KYC documents, which are; National ID/Passport, KRA Pin, Proof of Banking

Investments
  • What happens when there is a default?

    To evaluate a default, we need to look at the probability of default and the loss given default. The portfolio contains a highly diversified set of investment grade real estate assets that is selling off plan and liquid investments. Additionally, the corporate guarantee empowers investors to recover any amounts due from the promoter, Cytonn Investments Management Plc. A recent example is the minimal investments Cytonn HYS had in Imperial Bank and Nakumatt Commercial Paper; the defaults were taken up by the promoter, Cytonn Investments Management Plc, hence shielding our investors from any losses

  • What is the difference between a deposit offering a rate and an investment offering a rate?

    Deposit rates are fixed and guaranteed by the bank, which is regulated by the Central Bank of Kenya. The rate a bank can offer is largely determined by the rate at which they can lend the funds and still keep a margin. On the other hand, an investment rate is determined by the profit returns generated by the commercial enterprise in which the funds are invested, such as real estate development

  • What are the minimum amounts for each of the funds available on the mobile app?

    The CMMF minimum top-up is Kes 1000

    CPN and CHYS have minimum top-ups of Kes 100,000

  • How long does a direct bank deposit take to reflect if I use Pesalink?

    The funds reflect immediately

Cytonn Asset Managers
  • What is a Money Market Fund?

    A money market fund is a Collective Investment Scheme that pools funds from investors and invests in liquid interest earning instruments such as bank deposits, Treasury bills and commercial papers that have a short-term maturity profile. Each investor is allotted units in the fund based on the value of their investment.

  • What is the difference between a Money Market Fund and a Bank Deposit?

    A bank deposit is a security at a commercial bank, which can be fixed or flexible and earns an agreed interest rate. A money market fund on the other hand is a collective investment scheme, which does not have a fixed return, as the return fluctuates depending on the performance of the underlying investments in the fund, which may also include bank deposits.

  • What are the advantages of a Money Market Fund?

    There are a number of advantages of investing in a Money Market Fund:

    1. Professional Fund Management- as the fund is managed by investment experts
    2. Diversification- With a relatively small investment, investment in a money market fund provides access to a broad spread of securities thus minimizes financial risk
    • Potential for Higher returns- through pooling of funds and professional investment management, money market funds potentially provide superior returns than comparable products in the longer term
    1. Flexibility- you are able to easily move funds between various other collective investment schemes like the Balanced and Equity Fund
    2. Accessibility- the money market fund is liquid and easily accessible, meaning you can withdraw funds at short notice
    3. Safety- the fund is regulated by the Capital Markets Authority and is also overseen by a dedicated trustee and custodian whose role is to ensure that the fund manager acts in the investors’ best interest and conforms to best practice
  • Is the return fixed?

    No. The return from a money market fund is dependent on the performance of the interest earning instruments that the fund has invested in; therefore, the overall returns from the money market funds fluctuate depending on prevailing market interest rates

  • What is the expected return?

    Over the last 12 months, the average return for CMMF has been 11.0%. This will fluctuate depending on the interest rate environment and available investment opportunities

  • Is this return net of all fees?

    The return published is net of Management fees, but gross of withholding tax

  • When can I withdraw?

    You can withdraw funds from the Money Market Fund on short notice, as long as the funds have been invested for at least 14 days for a first time investor

  • Can the unit trust account be registered in the name of a minor?

    Yes. The minor is regarded as the legal owner and all the documents are to be signed by a parent or legal guardian if the minor is younger than 18. The child will be entitled to the investment after attaining the age of 18.

  • What is the CMMF account opening process?

    Method 1: Using the Application Form

    The client will fill the unit trust form and submit it along with KYC documents.

    KYC documents for individuals:

    1. Full ID copy
    2. KRA Pin
    3. Bank Details ( Copy of ATM or Bank Statements or a cancelled cheque
    4. Passport photo

    KYC documents for companies:

    1. Certificate of Incorporation
    2. Company Pin certificate
    3. Resolution of Mandate ( Authorizing the investment and the authorized signatories)
    4. Authorized signatories Pin Certificates and Copy of National ID
    5. The client will then deposit an initial investment of 5,000 into our KCB CMMF account ( Insert account number) and send the proof of transfer of funds to the FA
    6. The investment is processed and business confirmation sent to the client within 24 hours.

    Method 2: Using USSD

    Clients can also open a CMMF account by on their phone using the steps below:

    1. Dial *809#
    2. Select Create Account
    3. Enter your Name and ID number
    4. Enter your email address (optional)
    5. Enter FA Referral Code (optional)
    6. Confirm your Details
    7. Select Create Account
    8. You will then receive an SMS acknowledging account creation, the account PIN, client code and link to Terms and Conditions
  • How do I top up my CMMF account through USSD?

     

    1. Dial *809#
    2. Enter your PIN
    3. Enter the Amount you want to invest
    4. Choose method of payment i.e. M-Pesa or Bank transfer/deposit
    5. For M-Pesa Enter your M-Pesa PIN
  • How do I withdraw funds from my CMMF account?

    Method 1: Phone call/Email

    1. When you decide to withdraw your funds, simply send an email to operations@cytonn.com or call your Financial Advisor to initiate the process.
    2. On receipt of the email, you will receive an acknowledgement message from Cytonn and the funds will be remitted to your bank account in 2-4 working days.

    Method 2: USSD Withdrawal

    1. Dial *809#
    2. Select withdraw
    3. Enter the amount you wish to withdraw
    4. Select the account to send the funds to withdraw
Pension
  • What is Cytonn Personal Retirement Benefits Scheme (CPRBS)?

    This is a scheme designed to enable individuals to save for their retirement by making regular contributions to the scheme during their working years and growing their retirement savings. The retirement age for the scheme is 60 years. 

  • What is the minimum contribution?

    Members may contribute as low as Kshs. 1000 per month. 

  • How do I transfer my contributions from another retirement benefits scheme to CPRBS?

    To transfer contributions from another registered retirement benefits scheme to CPRBS, one would be required to fill an exit form for the said scheme and on the exit form, they choose the option of ‘transfer to another scheme’, where they will input the details of the CPRBS, including their membership number and the benefits will be transferred accordingly. 

  • Can I move my personal contributions from an umbrella to a personal scheme?

    Yes, upon leaving the service of the participating employer of the umbrella scheme, one can transfer their contributions as well as the employer’s contribution into a personal pension scheme. The process will be similar to 3 above 

  • How are the schemes assets invested?

    Each scheme has an Investment Policy Statement (IPS) that guides the Fund Manager when making investments of the Scheme. The IPS contains investment limits of the scheme’s assets in different asset classes. The limits are in line with the RBA regulation. 

  • What returns can I expect?

    CPRBS is a segregated scheme and as such cannot guarantee a return. However, our strategy as Cytonn Asset Managers is to have a well-diversified portfolio, capitalizing on our capability in alternative investments and thus optimize investment returns and offer members above market average returns, as we have been able to offer for all our products. 

  • Who are the service providers for the scheme?

    The service providers of the CPRBS are: 

    • Trustees- Kingsland Court Trustee Services 
    • Administrators- Enwealth Financial Services 
    • Custodian- Standard Chartered Bank 
    • Fund Manager- Cytonn Asset Managers Limited 
  • How do I join the scheme?

    Fill in the application form and attach a copy of your ID/Passport, KRA PIN and proof of address. Once you make your first contributions, you shall be issued with a membership number. 

  • What happens if I die or I am no longer able to meet the obligations?

    The total fund made up of the contributions plus the investment returns is paid to the nominated beneficiary upon death of the member. 

  • How do I know how much I have contributed to the scheme and the interest I have earned?

    We send contribution statements to members on a monthly basis. You can also log in into the client portal and see your client statement. The interest is distributed to the members once a year after the scheme is audited and thus the interest will reflect on your statement after distribution. 

  • Is there a need for me to join CPRBS if I already have NSSF?

    With NSSF monthly contributions being about Kshs 200 for employee and Kshs 200 for the employer, the benefits paid out are not enough to provide for your retirement, and thus you will need to join another scheme to help grow your retirement pot. 

  • Do the contributions I made to the scheme earn interest?

    Yes. Contributions are invested and start earning interest from the day the contributions are received. The total accumulated funds is made up of your contributions plus the investment income. 

  • Is it true that if I change my job I cannot access my benefits before attaining the retirement age?

    After changing jobs, you can access 100% of your contributions but you cannot access the employer’s contributions until retirement. You can however choose to transfer the benefits to another scheme. 

    For self-employed individuals, where there is no employer contributions, one can withdraw from the fund anytime, before retirement, and be paid 100% of their contributions, less applicable tax 

  • What is the difference between an income drawdown and an annuity?

    An income drawdown is an arrangement where at retirement, the retiree transfers his/her retirement benefits into an income drawdown fund and chooses to withdraw a certain percentage of his retirement benefits monthly, quarterly, semi-annual or annually for a minimum of 10 years. After the 10 years, one can withdraw the balance as a lump sum, continue with the drawdown or purchase an annuity. For income drawdown, the funds are invested and they continue to grow. 

    An annuity is a contract between an individual and an insurance company. In exchange for the lump sum that is paid by the individual, the insurance company agrees to make regular guaranteed payments according to the terms of the contract. 

  • How do I access my benefits on retirement?

    Your benefit is paid as a Lump Sum at retirement. You can then choose to purchase and annuity or transfer the benefits into an income drawdown fund. 

  • Are there any Tax benefits

    KRA allows tax relief of up-to 240,000p.a or 30% of your annual earnings, whichever is lower for amounts contributed to a registered scheme. At withdrawal or retirement, you are entitle do a tax free lump sum from the fund of 60,000 for every year of membership to the scheme subject to a maximum of 600,000 

  • Can I make additional voluntary contributions?

    Yes you can 

  • Can I change my nomination of beneficiary?

    You may change your nominated beneficiary or beneficiaries at any time with the scheme administrator 

  • Can I use the benefits as security to secure a mortgage?

    Yes. You can assign up to 60% of your accumulated benefits as additional security for a mortgage. 

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