The National Social Security Fund (NSSF) is seeking a Sh1.6 billion loan to finance the construction of a major housing complex in Kisumu as part of its renewed push into real estate investment.
The proposed loan will be sourced from a local commercial bank and will be used to bankroll phase one of the Kisumu Lakeview Estate, a mixed-use development designed to deliver over 1,300 residential units along with retail and recreational facilities aimed at the growing middle-income market in western Kenya.
According to documents filed with the Public Procurement Regulatory Authority, NSSF wants to leverage debt instead of drawing down its cash reserves in order to preserve liquidity amid rising benefit obligations to pensioners.
The Kisumu development, with an estimated total cost of Ksh8 billion, is viewed as the fund’s boldest regional investment outside Nairobi in over a decade.
NSSF’s management says the project will not only deliver decent returns to members but also contribute to the government’s affordable housing programme by expanding supply in urban centres.
The first phase will include 500 units comprising apartments and townhouses, with amenities such as schools, clinics, a shopping centre and green spaces.
Analysts say taking on Sh1.6 billion in debt signals NSSF’s growing appetite for leveraged real estate ventures despite past scrutiny over delays and cost overruns in similar projects.
The fund is betting on strong housing demand in Kisumu fuelled by county-led infrastructure upgrades, a growing expatriate hub and the expansion of inland port services.
The Kisumu Lakeview Estate will be implemented through the fund’s subsidiary, NSSF Investments Ltd, with groundbreaking expected later this year once financial closure is secured.
If approved, the loan would add to NSSF’s widening loan portfolio that already includes borrowings for developments in Nairobi’s Embakasi, Mavoko and Nakuru.
Written By Ian Maleve
