CPF Financial Services in talks with four counties to build affordable housing

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 has assets worth Sh 68.2 billion as of December 2021, is looking to build houses in Laikipia, Nakuru, Nairobi and Mombasa.

Pension firms are not allowed to invest or offer debt financing in housing projects of up to 10 percent of their asset portfolio, according to the National Treasury.

"We are still in discussions with the counties and we are yet to firm it up," said CPF director strategy finance and investment, Joseph Rono.

We had done our feasibility studies and only Nairobi had the oversupply of housing. Pension funds and insurers are attempting to increase their allocation to less volatile and long-term assets such as property, bonds and infrastructure.

This comes after their assets held in the stock market plummeted in value since the Covid 19 economic hit, which has led to a massive market selloff and a drop in share price.

A affordable housing project in Kisumu in 2020 was rolled out by the CPF in 2020, which has been delayed due to the high cost of materials and the sourcing of contractors.

The Sh 3.8 billion project at the old Anderson-Ofafa estate was expected to be completed in 48 months.

The counties are required to develop infrastructure, including water and sewer lines.

The units are expected to be sold at the price of Sh 1.5 million one bedroom, Sh 2.5 million two bedroom and 3.5 million three bedroom CPF Financial Services manages Laptrust, County Pension Fund, CPF Individual Pension Scheme and Salih, a segregated fund within CPF.