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HF quits home construction business in wake of losses

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HF Properties: HF Group is set to quit the homes construction business in a move that will lower its exposure in the real estate market. The mortgage financier will leave the construction business once it completes its on going construction projects.

“We will complete the houses we are building this year and we will not start any new construction,” Robert Kibaara, the group chief executive officer said.

According to a report that appeared in the Business Daily on Monday, HF Group will also free up substantial resources. “These resources are currently tied up in its property development subsidiary HF Development and Investment Limited (HFDI), which has some Sh. 1.2 billion of capital. Most of the assets and liabilities of HFDI will be transferred to HFC Limited, another unit which offers banking services,” the report said.

How real estate greed is leaving Kenyans broke and in debts

Following the exit, the company’s participation in real estate projects in the future will be through partnerships with other developers.

“HF rode the real estate boom that helped boost its net earnings to a high of Sh. 1.1 billion in the year ended December 2015. Reduced demand for houses, increased defaults and the interest rate caps saw the company post a net loss of Sh. 598 million in the year ended December 2018. The banking business is less cyclical but is increasingly being dominated by big banks operating on a large scale,” the report said. HF Properties.

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