(NAIROBI, KENYA) – The Central Bank of Kenya (CBK) faces a potential loss of KES 466.5 million ($3.6 million) on investment properties after an audit valued the assets below their acquisition and construction costs.
The Auditor-General’s office found that buildings constructed at a cost of KES 2.25 billion ($17.4 million) in January 2025 were valued at KES 1.84 billion ($14.2 million) by external valuers barely 18 months after completion. The project lost KES 410.9 million ($3.2 million) in value between 23rd January 2025 and the end of June 2026.
Two parcels of land acquired by the bank in January 2025 at a cost of KES 145 million ($1.1 million) were valued at KES 104.3 million ($807,000), a valuation loss of KES 40.6 million ($314,000).
Two perimeter walls constructed at a cost of KES 45.3 million ($350,000) and handed over in July 2025 and May 2026 were valued at KES 30.2 million ($234,000). The walls lost KES 15 million ($116,000) in value, with one wall losing millions less than a month after completion.
“The decline in value for the recently acquired assets raises doubt regarding the reasonableness of the original acquisition cost of these assets,” the Auditor-General said.
“In the circumstances, the Bank may not have obtained value for money in the acquisition of these assets.”
Land and property in Kenya has proved one of the most valuable asset classes over the past 20 years, with values appreciating across all cities and major towns. The valuer’s decision to reduce the value of CBK’s properties is therefore unusual.
The apex bank did not address the reasons for the decline when contacted by Business Daily, stating only that it followed due process when investing in the properties.
“All assets acquired by the Bank through purchase or construction strictly followed the requirements of the Public Procurement and Assets Disposal Act (PPADA), 2015, including engaging the Ministry of Lands, Public Works, Housing and Urban Development, prior to acquisition of land,” said CBK governor Dr Kamau Thugge.
“The procurement of these assets and related expenditure was audited, reviewed, and found to be in compliance with the relevant laws and Bank policies,” he added.
Dr Thugge did not disclose which buildings had their value reviewed downwards, the location of the two parcels cited by the Auditor-General, or where the perimeter walls were constructed.
The apex bank highlighted the acquisition of land in Meru for a planned CBK Centre and the fencing of a proposed CBK Nakuru Branch as recent achievements.
Some CBK buildings that came to market in early 2025 include the Police Housing Complex in Nairobi’s Industrial Area. The project had 210 fully furnished residential units comprising 200 two bedroom apartments and 10 three bedroom apartments.
CBK disclosed the project had a legal dispute resolved through arbitration. The bank paid KES 666 million ($5.2 million) in the arbitration process to a counterparty whose identity was not revealed.
CBK’s land and buildings were revalued as at 30th June 2026 by Milligan Valuers Ltd, Recad Valuers and Sec and M Valuers Co Ltd.
The valuation resulted in an overall revaluation gain of KES 1.68 billion ($13 million) arising from adjustment of previously overstated depreciation of KES 4.6 billion ($35.6 million). The adjustment helped wipe out a KES 2.9 billion ($22.4 million) valuation loss.
The bank’s land and buildings were valued at KES 18.2 billion ($141 million), down from KES 21.8 billion ($169 million) a year earlier. CBK spent KES 105 million ($813,000) acquiring additional property and disposed of KES 16 million ($124,000) worth of real estate assets.