Pension funds administrator CPF Financial Services is in talks with four counties to construct affordable houses as it seeks to increase its investment in the real estate sector.
The institution, which was managing assets worth Sh68.2 billion as of December 2021, is seeking to construct houses in Laikipia, Nakuru, Nairobi and Mombasa.
Pension firms are limited by the National Treasury to invest or offer debt financing in housing projects of up to 10 percent of their asset portfolio.
“We are still in discussions with the counties and we are yet to firm it up,” said CPF director strategy finance and investment, Mr Joseph Rono.
“The market for these units is there. We had done our feasibility studies and only Nairobi has the oversupply of housing.”
Institutional investors such as pension funds and insurers have been seeking to increase their allocation to less volatile and long-term assets such as property, bonds and infrastructure.
This comes as their assets held in the stock market plummeted in value since the Covid-19 economic hit, which has led to a massive market selloff hence a drop in share price.
CPF through its LAPTRUST scheme in 2020 rolled out an affordable housing project in Kisumu to develop 1,394 units, which has been delayed over the sourcing of contractors and the high cost of materials.
The Sh3.8 billion project at the old Anderson-Ofafa estate was expected to be completed and ready for occupation in 48 months.
Construction involves an agreement with the counties to develop infrastructure including water and sewer lines.
The units are expected to be sold at the price of Sh1.5 million (one bedroom), Sh2.5 million (two bedroom), and Sh3.5 million (three bedroom).
CPF Financial Services manages Laptrust, County Pension Fund, CPF Individual Pension Scheme and the Salih, a segregated fund within CPF.