Old Mutual exits East African property market

Old Mutual Holdings Plc, a leading regional insurer, has announced plans to divest its entire portfolio of investment properties across East Africa, signaling a strategic exit from the underperforming real estate market.

The move is part of the company’s broader restructuring efforts to boost growth amid challenging market conditions.

The portfolio, valued at Sh19.4 billion as of last year, includes high-profile properties such as the iconic 31-storey Old Mutual Tower in Nairobi’s Upper Hill, valued at Sh5.5 billion. Other key Nairobi assets include Equity Centre, Telkom Place, Union House, NCBA Annex, and Kimathi House.

In Uganda, the insurer owns Nakawa House, Nakawa Business Park (valued at Sh4.3 billion), and a plot of land. In South Sudan, properties include Juba Apartments, Equatoria Tower, and a plot, while Rwanda hosts a single plot valued at Sh258.8 million.

Old Mutual’s Chief Executive Officer, Arthur Oginga, confirmed the company is actively seeking buyers. “We have sales agreements for two properties in Kenya, a deposit paid by the Rwandan government for a property, and valuation processes underway in Uganda.

ALSO READ: SAFARICOM BUSINESS HIGHLIGHTS ENTERPRISE DIGITAL SOLUTIONS

In South Sudan, we’ve received offers,” Oginga said. He added that the Old Mutual Tower is being marketed as a standalone asset, with negotiations ongoing.
“If we get offers for all our properties, we will sell them.”

The decision follows lackluster returns, with real estate yields remaining in single digits and weak capital appreciation over the past decade. Oginga noted, “Yields don’t match market interest rates, and capital appreciation has been flat, making real estate a challenging investment.”

The insurer also reported a 99% profit drop to Sh5 million from Sh327 million, driven by lower interest income, fair value losses, and reduced insurance premiums. Previously, Old Mutual explored consolidating its properties into a real estate investment trust (REIT) but has now prioritized a full portfolio sale to refocus its business strategy.