The fund manager plans to build 211 maisonettes in Kitengela. Photo/FILE
Financial services firm Alexander Forbes plans to develop a real estate project as it looks to reduce dependence on equities.
The fund manager plans to build 211 maisonettes in Kitengela, some 30km out of Nairobi, which it will sell to its members at concessionary mortgage rates, having already stuck a deal with a strategic partner.
The company estimates that less than five per cent of all retirees have a home, a factor that eats into their pension and pushes a sizeable number into old-age poverty.
But even as the company moves to actualise the project, pension funds are finding themselves in a interesting dilemma.
The valuation of real estate projects has been on growing at a faster rate than projected, which has left fund managers pondering on how to restructure their portfolio to ensure that the real estate share remains within the 30 per cent upper limit.
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