By The Weekly Vision Reporter
The KenGen Staff Retirement Benefits Scheme (KSRBS) has sold two of its flagship commercial properties, Pension Plaza I and Pension Plaza II, to its sponsoring employer, Kenya Electricity Generating Company PLC (KenGen), for a combined Sh1.9 billion.
However, the scheme’s financial statements for the year ended 31 December 2025 indicate that the two properties had a combined independent valuation of approximately Sh3.8 billion, raising questions about the basis on which the sale price was determined.
According to the financial statements, independent valuers assessed Pension Plaza I at approximately Sh2.0 billion and Pension Plaza II at approximately Sh1.8 billion, giving the properties a combined value of about Sh3.8 billion. The same statements disclose that the properties were sold to KenGen for a total consideration of Sh1.9 billion.
The financial statements describe the transaction as part of a broader portfolio rebalancing strategy aimed at reducing the scheme’s exposure to illiquid real estate and increasing investments in fixed-income securities and other income-generating assets.
Such a strategy is common among mature pension schemes, particularly those with ageing memberships and declining contributions, as it enables trustees to align investment assets with future pension obligations better. However, the financial statements do not explain why assets carrying a combined independent valuation of Sh3.8 billion were disposed of for Sh1.9 billion, nor do they indicate whether the sale price was based on a more recent valuation or other commercial considerations.
Under Kenya’s Retirement Benefits Act and the Retirement Benefits Authority (RBA) guidelines, transactions between a pension scheme and its sponsoring employer are permitted, provided they are conducted on an arm’s-length basis and supported by independent valuations and appropriate governance processes. Trustees also have a fiduciary duty to act in the best interests of scheme members when disposing of scheme assets.
The Weekly Vision has not independently verified the methodology used to determine the Sh1.9 billion purchase price. It is therefore unclear whether the difference between the disclosed valuation and the sale price reflects updated valuations, adjustments for liabilities attached to the properties, negotiated commercial terms, or another factor not explained in the financial statements.
Property transactions conducted through negotiated sales rather than open-market bidding may attract discounts. However, the extent of any discount depends on the circumstances of each transaction and cannot be assessed without further information regarding the valuation methodology and sale terms.
The KSRBS Defined Benefits Scheme, which closed to new members in December 2011, had 767 members and approximately Sh10 billion in assets under management as at September 2025. The scheme also operates a Defined Contribution section and is regulated by the Retirement Benefits Authority.
Like many mature defined benefit pension schemes, KSRBS faces the challenge of meeting growing pension obligations from a closed membership base. This has prompted many schemes to shift investment portfolios towards more liquid, income-generating assets capable of supporting regular pension payments.
The scheme also appears to be reviewing its wider property portfolio. Earlier in 2026, it invited consultancy services to assess the “highest and best use” of KenGen RBS Gardens, a portfolio of furnished and serviced apartments, signalling a broader strategy to reassess its real estate investments.
Given the apparent difference between the independent property valuations disclosed in the financial statements and the reported sale consideration, additional clarification from the scheme’s trustees or KenGen would assist members and the wider public in understanding how the final transaction value was determined.
