The TelPosta Pension Scheme targets about Sh10 billion from the planned sale of four strategic assets to the government, as part of a strategy to cut its exposure in the property market to the permitted maximum of 30 percent.
The pension scheme, which currently has about 83 percent of its investment portfolio in land and real estate properties, says the government has identified four properties as strategic assets and wants to buy them instead of offering them to private buyers.
The four properties are the iconic TelPosta Towers in Nairobi, Gilgil GTI staff quarters, and two flats in Makande and Bombolulu in Mombasa.
TelPosta Pension Scheme administrator Peter Rotich said in an interview that negotiations are already underway for the government to purchase the four properties, in which the scheme hopes to fetch about Sh10 billion.
“We sought approval from the Treasury to enable us to dispose of properties. The government gave us approval to dispose of the properties, and one of the conditions in the approval was that we give it priority when it comes to disposing of properties of strategic nature,” he told Business Daily in an interview.
“Government identified the four assets as being of strategic importance and expressed interest in acquiring them. Now we are engaging them to ensure they give us the money. We are targeting about Sh10 billion.”
Telposta Towers is located on Nairobi’s main Kenyatta Avenue and has 403,826 square feet of space across 29 floors, with 98 percent of it presently occupied by government ministries.
Telposta Towers, commonly known as GPO, in Nairobi's central business district.
Photo credit: File| Nation Media Group
The Gilgil property has 174 rental units and 68 acres of undeveloped land. In Mombasa, the Makande flats have 100 units while the Bombolulu flats have 88 units.
Mr Rotich said that, as of June 2025, the scheme had Sh12.21 billion or 82.71 percent of its Sh14.76 billion investment portfolio in properties, followed by Sh1.7 billion or 11.54 percent in government paper.
About Sh440.35 million or 2.98 percent was in quoted equities, while fixed deposits took up Sh393.74 million or 2.67 percent, leaving 0.1 percent or Sh14.6 million in corporate bonds and cash and demand deposits.
Mr Rotich said the scheme is eyeing about Sh5 billion from the sale of other assets, which, combined with the disposal of the four properties to the government, will increase investments in liquid assets.
The scheme wants to increase investments in Treasury bills, Treasury bonds, corporate bonds, cash, and money markets, and impact investment classes like the infrastructure fund.
“Property has served the scheme well by generating stable rental income and supporting the scheme over the years. But rebalancing our portfolio will give us higher and more predictable yields than rental income,” said Mr Rotich.
Return shift
He said that apart from Telposta Towers, which has been giving annual returns of between seven and nine percent, the rest of the properties have been averaging up to 0.9 percent returns, weighed down by high administrative costs.
Between 2001 and 2025, the scheme spent Sh532.38 million on property-related legal costs, mainly to recover properties from grabbers, non-paying tenants, and illegal occupants. Mr Rotich said cutting down property holdings would significantly reduce administrative costs.
TelPosta was established on July 1, 1997, as a defined benefit scheme to provide retirement benefits to the staff of Telkom Kenya Limited. It became a closed scheme in 2007, meaning it does not admit new members.
The scheme pays out an average of Sh11,895 every month to its members. Since becoming a closed scheme, it has paid out over Sh14.5 billion to its over 5,000 members. Now nearly 84 percent of the scheme’s members are aged between 60 and 79 years.
Most of the scheme’s members are former employees and dependents of people who worked at East African Posts & Telecommunication Corporation (EAPTC) and Kenya Posts & Telecommunication Corporation (KPTC).
The membership is comprised of ex-employees who left the service before the scheme became closed and retired employees or dependents of former employees who died while in the service or in retirement.
EAPTC and KPTC gave birth to Telkom Kenya Limited, Postal Corporation of Kenya and Communications Authority of Kenya, which later set up their own separate pension schemes, leaving Telposta as a closed scheme.
The State funded TelPosta to the tune of Sh8 billion at the time of converting into a closed scheme, with Sh3.7 billion being transferred to the resultant schemes where some members transitioned to.
