Three government ministries have agreed to spend KSh9.62 billion to acquire properties owned by the Telposta Pension Scheme as the retirement fund moves to reduce its heavy investment in real estate.
The planned purchases involve the Ministry of Information, Communications and the Digital Economy, the National Police Service and the Ministry of Defence. According to the scheme’s latest annual report, the transactions cover four properties in Nairobi, Mombasa and Gilgil.
The ICT ministry will pay KSh6.85 billion for Telposta Towers along Nairobi’s Kenyatta Avenue. The National Police Service will spend KSh1.27 billion to acquire flats in Makande and Bombolulu in Mombasa, while the Defence ministry has agreed to buy staff quarters in Gilgil for KSh1.5 billion.
The Cabinet approved the purchase of Telposta Towers on April 27, 2026. The scheme’s trustees are now working with the ministry to finalize the payment plan and sale agreement.
“The trustees held a series of meetings with the prospective buyer and are in the process of finalizing a payment plan and executing the sale agreement,” the scheme said. Telposta Towers has 29 floors covering 403,826 square feet, with government ministries occupying 98 per cent of the available space.
The police acquisition covers 100 flats in Makande and another 88 in Bombolulu. The KSh1.27 billion purchase will be financed over three financial years. Meanwhile, the Gilgil property comprises 174 rental units and 68 acres of undeveloped land. The Defence ministry will pay for it in three instalments of KSh500 million, due on October 31, 2026, January 31, 2027, and July 31, 2027.
The sales will help the pension scheme diversify its investments, improve access to cash and reduce its dependence on property to meet retirement obligations.
Property accounted for 90.44 per cent of the scheme’s investment portfolio in the year ended June 2026, up from 82.71 per cent a year earlier. This exceeded the Retirement Benefits Authority’s 30 per cent limit on investments in immovable property.
The scheme is also facing rising operating costs. Its net assets fell to KSh13.64 billion in June 2026 from KSh14.50 billion a year earlier, while investment income remained largely unchanged at KSh986.5 million.
Property management expenses rose by 62.2 per cent to KSh892.5 million, while spending on repairs, refurbishment and utilities increased eightfold to KSh403.76 million.
The scheme closed to new members and future benefit accruals on November 30, 2007. Nearly 84 per cent of its members are aged between 60 and 79, making access to liquid investments increasingly important as the fund meets its pension obligations.