Tatu City says it has initiated talks with Nairobi Securities Exchange (NSE) seeking to raise funds to finance 5,000 low-cost housing units.
The 5,000-acre urban housing and commercial-cum-industrial development owned by Rendeavour Group said it was keen to float a Development Real Estate Investment Trust (D-Reit) product targeting pension scheme members.
Rendeavour Group country head Nick Langford said the group was willing to use internal funds to develop the low-cost units within the vast facility in Ruiru once they get a commitment from several pension schemes.
They are hoping pension funds will take up the units for their members.
“We are keen to contribute to the Big Four government agenda, especially on affordable housing pillar and we are in early stage talks with NSE to rope in pension schemes.
“If we get a commitment of uptake by pension scheme members, then we shall inject money into the 5,000 housing units development project.
We have since obtained designs for the planned apartments and will move fast to get approvals done once our talks bear fruit,” he said.
Speaking at this year’s East Africa Property Investment (EAPI) summit, Mr Langford said Kenyans hold billions of shillings and were waiting for the right product to be floated on the market.
He welcomed ongoing developments on land reforms and digitisation of records saying it will boost product innovation especially in the housing development space.
“We need a new marketable asset class that can tap into billions of shillings held by various entities. In fact, some pension schemes have over-invested in real estate, which is a one-off product, but D-Reit presents pension schemes with a product that is attractive to members who will get houses and profits to their schemes,” he said.
Currently, pension funds have risen to Sh1 trillion where the Retirement Benefits Authority Act allow pension schemes to invest up to 90 per cent of their assets, with a window of up to 100 per cent in government securities within East African Community bloc.
Retirement schemes can also invest up to a third of their funds in real estate, up to 70 per cent in preference shares and listed stocks, 100 per cent in guaranteed funds, 15 per cent in offshore investments, 10 per cent each in private equity and venture capital.