Pension industry executives root for a national Reit to fund affordable housing

CPF Trust Fund Financial Services CEO Hosea Kili. [Wilberforce Okwiri, Standard]

Pension administrators are lobbying for a national Real Estate Investment Trust (Reit) as the body that will key in mobilising funds in the industry for investment in affordable housing.

The national Reit will be alongside Income Reits (I-Reit) and Development Reit (D-Reit) where some of the investment companies in the country fall. The national Reit will be known as the Kenya National Real Estate Investment Trust (KNR).

The push for a national Reit is being lobbied by the Association of Pension Trustees and Administrators of Kenya (Aptak), which took part in the recently held affordable housing conference organised by the Kenya Mortgage Refinance Company (KMRC).

According to a presentation by CPF Financial Services Group Managing Director Hosea Kili, the national Reit will also act as a pension industry shareholder.

This is as the D-Reit will continue with its function of execution of housing projects via various special purpose vehicles and I-Reit as the investment vehicle for those who put their money in the capital market. Mr Kili said that through Aptak, pension trustees and administrators are lobbying the industry and government to conceptualise a Kenya National Reit structure that will provide end-to-end affordable housing funding.

"The KNR can be sponsored by the Ministry of Lands and be hosted at Capital Markets Authority (CMA) as a self-regulatory body," said Kili, who is also Aptak chairman. He said the rationale of having a national Reit is that the process of titling, issuance of sectional titles and other registrations will be expedited.

"It is critically important to note that the pension industry can support and fund the affordable housing initiative via an appropriate end-to-end legal entity (the Kenya National Reit) backed by all major pension schemes and regulators in order to guarantee its legitimacy and adequate funding."

Mr Kili noted that Laptrust and County Pension Fund scheme have a diversified investment portfolio that includes affordable housing and Reits, as ways of unlocking existing properties across various counties.

"Affordable housing is a noble idea if implemented well. The investment environment should be made attractive and good governance structures should be put in place.

"A clear regulatory framework on how pension schemes invest in affordable housing should be put in place."