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

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 build affordable houses as it seeks to increase its investment in the real estate sector.

The institution, which had assets worth Sh 68.2 billion as of December 2021, is looking to build 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.

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

We had done our feasibility studies and only Nairobi had the oversupply of housing. Pension funds and insurers are looking 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 resulted in a massive market selloff and a drop in share price.

In 2020, the CPF rolled out a affordable housing project in Kisumu to develop 1,394 units, 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.

An agreement with the counties is needed 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, the County Pension Fund, CPF Individual Pension Scheme and Salih, a segregated fund within CPF.