Residential Projects

Developer unveils show house for Sh2.6bn Kitengela estate

Riverine Estate, which sits on 30 acres of land, comprises 211 maisonettes and apartments.

Updated on

September 17, 2015

Financial services firm Alexander Forbes has opened the show house for its Sh2.6 billion Riverine Estate in Kitengela, about 30km from the Nairobi central business district.

The fund has also invited its members as well as interested non-members to reserve houses in an offer that runs until the end of the year.

Riverine Estate, which sits on 30 acres of land fronting the Nairobi-Namanga road, comprises 211 maisonettes and apartments that will be sold to both members and non-members of the firm’s pension fund.

The development will also feature a commercial centre, a resource centre with meeting rooms, a gym as well as a nursery school.

“Although the property is aimed at addressing members’ housing needs after retirement, some of the units will be sold to non-members at higher prices to maximise returns,” Ms Lucy Kambuni, the chair of AF Retirement Fund’s board of trustees said during the launch of the project in July 2014.

Construction of the Riverine Estate, which is earmarked for completion by December 2017, is being undertaken by Landmark Holdings – a local construction company.

Alexander Forbes has signed a deal with KCB to finance its members at concessionary mortgage rates based on their savings.

Members wishing to buy the houses through mortgages will be allowed to utilise up to 60 per cent of their retirement benefits to secure the loans. On the other hand, non-members will be required to place a 20 per cent deposit and complete the balance by 2017 before they are allowed occupy the the units.

Alexander Forbes joins a growing list of pension funds that are investing into the real estate sector in a bid to diversify income and increase profitability.

Other pension funds that have in recent years committed billions of shillings into the local real estate market include the National Social Security Fund (NSSF), the KCB Staff Pension Fund, the Safaricom Staff Pension Scheme and the KenGen Staff Retirement Benefits Scheme.

READ: Pension funds surge into real estate market

The rising interest in real estate signals a structural shift by pension managers away from their traditional holdings of stocks and bonds into “real” assets such as property and infrastructure.

The Kenyan construction industry expanded by 5.5 per cent in 2013 up from 4.8 per cent a year earlier indicating developers’ enhanced interest in the sector.