Postbank defends Sh1.5bn property sale

Kenya Post Office Savings Bank (Postbank)
has defended its agreement to sell an expansive commercial property in
Nairobi’s Muthaiga neighborhood to an unnamed government agency for slightly
more than Sh1.5 billion.

After reinvesting the proceeds in other
assets, including Treasury bonds, the state-owned savings bank claims it is
earning nearly nine times the annual rental income it used to receive from the
Postbank Training Centre in the Karura area.

“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.”

Buildings, a water reservoir, a swimming
pool, and other developments are located on 15.45 acres of land along Coffee
Garden Road, off Kiambu Road.

Postbank sought buyers for the property in
December 2017, then re-advertised it in March 2019.

The Judiciary, which previously rented the
property through the Judiciary Training Institute, was one of the institutions
that expressed interest in purchasing the commercial block.

The Judiciary had asked the Treasury for
assistance in funding the purchase of the Sh1.2 billion premise.

Judiciary was renamed Kenya Judiciary
Academy last year (formerly JTI).

JTI, which was founded in 2008, provides
in-house training for judges, judicial officers, and judicial staff.

Mr. Lekolool was unable to identify the
government entity that purchased 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.