Insurance firms that have invested billions of shillings in the property market are counting losses owing to the low returns from the sector and lack of tenants to take up the huge empty spaces. Most commercial buildings across the region – including the two tallest – are owned by insurance firms. The property slump over the years, worsened by the effects of Covid-19 pandemic is leaving behind a trail of losses. In a previous interview with The Standard, Jubilee Insurance Chairman Nizar Juma castigated the obsession with “big buildings” by his rivals. “All these big buildings, they win awards for them but are 90 per cent empty. We want investments which are paying,” said Juma. UAP Holdings however describes its towering buildings spread across East African capital cities as the firm’s “pillars of stability.” After all, its 163-metre tall UAP Old Mutual Towers in Nairobi’s Upper Hill is one of the tallest buildings in the region, only second to the 200-metre high Britam Towers. “From defining skylines to standing as key landmarks as well as offering scenic views from their topmost floors, these buildings speak to our long term commitment to the region and its prospects,” said the firm in pride laced advertisements. But last month, UAP Holdings saw its loss after tax for the year ending 2019 widen to Sh3.4 billion, from Sh518 million the previous year. The loss was attributed to their property business which posted a loss of Sh4.8 billion, with the company last year issuing a profit warning. Announcing the results, Group Chief Executive Arthur Oginga said the firm’s loss was mainly due to one-off fair value write-downs on the group’s investment property portfolio. This was as a result of the softening of the markets in Kenya and Uganda and the prevailing operating environment challenges in South Sudan. “The property market across East Africa has been softening with rental yields declining,” said Mr Oginga in a virtual briefing to investors. “It’s therefore unsurprising that when we received the valuations done by independent valuers, there’s been a significant drop in the value of our properties and as a consequence, we’ve reported a significant impairment of our assets,” he added. Mr Oginga was however optimistic that despite the disappointing results, it was “a story of two parts” as its core business was still returning a profit. It more than doubled, posting a profit before tax of Sh1.7 […]