The Kenya Electricity Generating Company (KenGen) has purchased two office towers from its staff pension scheme for Sh1.9 billion, a move aimed at complying with regulatory investment limits and improving the pension fund's liquidity.
According to disclosures from the KenGen Staff Retirement Benefits Scheme, the acquisition includes the eight-storey Pension Plaza 1 and the 12-storey Pension Plaza 2, both located on Kolobot Road in Parklands, Nairobi, opposite Stima Plaza. The transaction was completed in the year ending December 2025.
Compliance and Strategic Portfolio Adjustment
The sale of these properties reduced the pension fund's exposure to real estate from 42.4% to 20.39% of total assets, bringing it within the Retirement Benefits Authority (RBA) guideline that caps property investments at 30%.
The scheme's annual report states that this disposal was part of a strategic rebalancing to ensure compliance with RBA regulations and to shift towards more liquid, income-generating assets that support benefit payments and cash flow flexibility. The fund's Defined Benefits plan, closed to new members since 2011, has increasingly focused on liquid investments to meet rising benefit obligations.
Valuation and Investment Impact
Independent valuations placed the properties between Sh1.8 billion and Sh2 billion, with the final sale price of Sh1.9 billion falling within this range. Proceeds from the sale have been reinvested in higher-yielding fixed income and money market instruments, delivering returns above the actuarial assumed rate of 10%, thereby strengthening the scheme's funding position.
The scheme now holds the majority of its investments in government securities, accounting for 66.1% (Sh6.53 billion) of the Sh9.88 billion portfolio, with property investments at 20.39% and equities at 9.92%.
Ongoing Property Strategy
This transaction forms part of a broader property exit strategy, with another asset, RBS Gardens, still under management and slated for future sale. The trustees emphasized their commitment to ongoing monitoring of asset allocations to maintain compliance with RBA limits while optimizing diversification and returns.
