The National Social Security Fund has announced plans to sell off three prime properties in Nairobi in a move to comply with requirements set by the Retirements Benefits Authority.
The government-backed workers’ retirement fund has put Hazina Trade Centre Tower, Viewpark Towers and a two acre piece of land in the Community area on sale in a transaction expected to raise at least Sh2.5 billion.
The two landmark buildings located at the central business district are estimated to be worth Sh2.4 billion while the parcel of land in Community is valued at Sh400 million.
According to sources at the NSSF, the fund is disposing off the properties in order to comply with the law which require pension funds to maintain a significant portion of liquid assets so they can meet the monetary obligations to retirees.
“Selling off the properties will help us to move into compliance with the requirements laid out by RBA,” said an official of the fund on condition of anonymity as she is not authorized to speak to reporters.
RBA requires that pension funds hold a maximum of 30 per cent of their asset portfolio in property to ensure at least 70 per cent of the asset portfolio can be liquidated easily to pay retirees.
In June 2011, NSSF portfolio was estimated at Sh110 billion and the value of its land and property was more than the allowable 30 per cent (Sh33 billion).
Property analysts say the sell-off will help the NSSF to make huge capital gains on the properties which were acquired and developed in the 90s when valuations in the property market were low.