Postbank defends Sh1.5bn property sale – Business Daily
New Postbank managing director Raphael Lekolool. PHOTO | COURTESY
Kenya Post Office Savings Bank (Postbank) has defended its deal to sell the expansive commercial property in Muthaiga, Nairobi, to an undisclosed government agency for slightly more than Sh1.5 billion.
The State-owned savings bank says it is earning nearly nine times more than the annual rental income it used to get from Postbank Training Centre in the Karura area after it reinvested the proceeds in other assets, including Treasury bonds.
“It was a very good and strategic decision because we are getting over Sh100 million from what we have [re-]invested that money, and if we wanted we are still able to go and rent another Karura elsewhere and still get pocket change,” Postbank managing director Raphael Lekolool told Business Daily.
“It is the way that we are trying to restructure the institution by getting rid of these non-core assets and putting that money into investments that give us a better return.”
The property comprises buildings, a water reservoir, a swimming pool and other developments, sitting on 15.45 acres of land along Coffee Garden Road, off Kiambu Road.
Postbank first sought buyers for the property in December 2017 before re-advertising the sale in March 2019.
The Judiciary, which used to rent the property under Judiciary Training Institute, was among the institutions that expressed interest in buying the commercial block.
The Judiciary had engaged the Treasury to help fund the acquisition of the premise that was at the time valued at Sh1.2 billion.
Judiciary last year relocated to the renamed Kenya Judiciary Academy (formerly JTI).
The academy, which was established in 2008 as JTI, conducts in-house training for judges, judicial officers and judicial staff.
Mr Lekolool could not name the government entity that bought the property.
“We have managed to dispose it off to another government agency. The funds we got [from the sale], we have reinvested and built up our asset base,” he said.
The average value of land in Muthaiga was estimated at Sh139.3 million per acre when the bank first sought buyers in December 2017.
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