National Social Security Fund (NSSF) on Monday said it has cancelled last week’s tender that was seeking buyers for three plots because it did not attach the lease documents of the current occupants of the prime properties. Photo/File
National Social Security Fund has put on hold plans to sell two of its prime properties — Hazina Towers and View Park Towers in Nairobi’s Central Business District and car park.
The fund on Monday said it has cancelled last week’s tender that was seeking buyers for three plots because it did not attach the lease documents of the current occupants of the prime properties.
“We cancelled the advertisement once we realised that some documents such as those detailing the lease owners of the said properties had not been bound to the tender document,” said Tom Odongo, the acting managing trustee of the NSSF.
“A new tender that details all the facts about the properties will be placed in a week’s time.”
The fund cancelled the sale at a moment when it has come under scrutiny for paying hundreds of millions of shillings in controversial Moi-era transactions.
The companies paid are Mugoya Construction and Engineering Company (Sh390 million) S.K. Jirongo/Sololo Outlets (Sh490 million) and Pan African Builders and Contractors (Sh590 million).
The fund is selling off the properties — which are estimated to raise Sh3.5 billion — to move into compliance with the law which requires retirement funds to maintain a significant portion of liquid assets that can be easily cashed to meet payments to retirees.
NSSF has been in breach of the rule on property ownership limit due to a history of political interference.
The Retirements Benefits Authority (RBA) requires pension funds including NSSF hold a maximum of 30 per cent of their asset portfolio in property to ensure that they are able to meet the monetary obligations to retirees.
The RBA has over time prodded upon NSSF to reduce its exposure to property, but had not set any timelines that the workers’ fund had to have complied by.
The sale of the properties now marks the single biggest move by the fund to offload land and buildings, even as it eyes to benefit from the ongoing boom in the real estate market with the development of homes for sale in its Nyayo estate in Embakasi.
The Hazina Towers and View Park towers are valued at Sh1 billion and Sh1.8 billion respectively, according to Mr Odongo, and property analysts value undeveloped plot next to the Israeli embassy that is currently used as car park for Sh700 million.
The sale of the properties has been on the NSSF radar since late last year and the fund needs the money to put in government paper and in the equities market.
“Over the past years, we have managed to reduce our real estate investments from 60 per cent in 2004 to 32 per cent last year to realign with the RBA requirement to lower liquidity in the portfolio, “ added Mr Odongo.
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