Iconic Teleposta Towers set for sale in major pension portfolio shift

The Teleposta Pension Scheme has announced its plans to liquidate up to 70 percent of its asset portfolio, an equivalent of about Ksh.10 billion to Ksh.11 billion from a portfolio of Ksh.14.1 billion, in a strategic shift aimed at improving the scheme's liquidity and improving its ability to meet member obligations.

The move will see the scheme dispose of several prime property holdings, including the iconic Teleposta Towers in Nairobi, as it moves away from traditionally immovable assets such as real estate investments toward more flexible financial instruments.

According to Teleposta Pension Scheme management, the move to pivot from overreliance on assets to liquidity is part of the scheme to ensure that it offers its members a return that takes into account the inflationary pressures they face day to day, arguing that some take home as little as Ksh.11,895.

In increasing their exposure to liquid assets, the scheme says this will allow them to tap into new asset classes such as the government-backed National Infrastructure Fund, the bond market, and other securities.

This move, they’re optimistic, will deliver more revenue, and align with regulatory requirement to hold assets up to a maximum of 30 percent of the portfolio.

Teleposta Scheme CEO Peter Rotich said: “We are rebranding because we are exiting the property portfolio. Once we exit it is a new way of doing things, because the moment we exit from 83 percent maybe to 35 percent, there will be other benefits that will accrue to our members once we will review the benefits in payments that is very critical.”

The planned asset liquidation is coming at a time when pension schemes are under growing pressure to balance long-term returns with short-term liquidity needs.

In the liquidation, the scheme is seeking to raise between Ksh.10 billion and Ksh.11 billion, representing an equivalent of 70 percent of their total assets under management.

“Being closed we have to be very conservative because our members are old so we are very conservative where we put our funds. Teleposta Towers will go in the market. We are already having engagement with government ,we are also going to dispose of Bombolulu, Makande, Aga Khan, GTI and other properties,” said Rotich.

According to Teleposta management, although property investments have historically delivered stable returns, the overhead cost of maintaining and running them has resulted in the consideration

“We want to ensure that members get value for money from the assets they have, and that explains why we are moving from our property holdings, which have been generating very low returns,” Rotich added.

“It's only one property that has been giving us close to 7 percent. The other properties/residentials have been giving us close to negative 2 percent, and we have been spending so much in administrative cost.”

The liquidation process is set to take the next two years, with the scheme committing to engage actuaries to help determine how the benefits will go to members