A REVIEW OF REAL ESTATE PORTFOLIOS OWNED BY DC PENSION FUNDS IN KENYA

Naburi Ayub and Ametefe Frank

AfRES from African Real Estate Society (AfRES)

Abstract: One of the primary objectives of investment policies for retirement benefits funds especially DC schemes is to maximize the returns on investments within the risk constraints and levels acceptable to the board of trustees. Investments into the real estate sector by DC schemes has been growing over the last couple of years. This study addresses three critical questions. What is the growth rate of Real Estate Portfolios owned by DC Pension Schemes? What are the returns from Real Estate Porolios owned by DC Pension Schemes? Is the growth of Real Estate Portfolios based on return on investment? Descriptive statistics will be performed on the data to summarize the variable data, therefore, facilitang its understanding. The descriptive statistics selected for this study include the mean, standard deviation, frequencies, maxima and minima. The analysis of trends in the composition of real estate portfolios in annual valuations of pension funds and annualized total returns of property portfolios will be conducted. The total annual returns consist of rental yield and capital appreciation (obtained from fair market value gain). An annualized total return is the geometric average of the amount of money earned by a portfolio each year over a given time period. The Weighted Average Annualized Property Porolio Returns from 2012 to 2021 will then be computed in order to answer the three research questions. The results will redefine the future trends in property investments by DC pension schemes and consequently the larger real estate industry given the significant role of pension schemes in the economy. This study will provide information to trustees and fund managers to guide the real estate portfolio selection and allocation in order to optimize the returns on investments in DC pension funds.

Keywords: Allocation & Selecon; DC Pension Schemes; Real Estate Portfolio; Return on Investment (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2022-01-01
New Economics Papers: this item is included in nep-age and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:afr:wpaper:2022-004

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