This archive report was first published on 6 January 2020.
HF Group, a leading mortgage financier, has made the strategic decision to leave the homes construction business, a move aimed at reducing its exposure in the real estate market.
According to a report published on January 6, 2020, by Business Daily, HF Group will complete its ongoing construction projects and cease new construction activities.
"We will complete the houses we are building this year and we will not start any new construction," said Robert Kibaara, the group chief executive officer.
As part of its exit strategy, HF Group will transfer most of the assets and liabilities of its property development subsidiary, HF Development and Investment Limited (HFDI), to HFC Limited, another unit that offers banking services. HFDI has a capital base of approximately Sh. 1.2 billion.
By exiting the homes construction business, HF Group aims to free up substantial resources, which will be redirected towards other business ventures. The company's participation in real estate projects in the future will be through partnerships with other developers.
HF Group's decision to exit the homes construction business comes after the company posted significant financial losses in recent years. In the year ended December 2018, HF Group reported a net loss of Sh. 598 million, a stark contrast to its net earnings of Sh. 1.1 billion in the year ended December 2015.
