Nairobi – Kenyan-based financial services group UAP Holdings is set to invest Sh4.3b in a real estate project in Kigali as it seeks to grow earnings from the booming regional property sector.

According to UAP chief executive Dominic Kiarie, the company recently acquired a prime piece of land in the Rwanda capital where it will build residential and commercial properties. "We shall undertake a commercial mixed used development that is estimated at $50m (Sh4.3 billion),” Kiarie said.

The firm expects to raise Sh2 billion through a corporate bond and part of the cash could be used to fund the property development, among other investments. This is the latest real estate venture by UAP, which has stepped up its property portfolio to earn higher returns and diversify away from quoted equities and fixed income investments.

The firm also expects to complete its Equatoria Tower in Juba, South Sudan by August. The property will have 71,000 square feet of space for renting out.

The Kigali project is expected to boost UAP’s earnings from investments as insurers look at real estate to deploy their own cash and premiums paid by customers.

The company raised the allocation of its investments to property to 45 per cent last year, up from 40 per cent in 2012. This saw the share of bonds and equities drop to 40 per cent and 18 per cent respectively from 45 per cent and 22 per cent in the review period.

The property investments contributed 21.9 per cent of the company’s pre-tax profit last year, generating revenues of Sh573m or 4.4 per cent of total sales. The firm’s general and life insurance, however, account for the bulk of its net profit which rose 31 per cent to Sh1.8 billion in the year ended December.

UAP says it is also expanding in the insurance business, with the company entering the Tanzanian market last year with its acquisition of a 60 per cent stake in Century Insurance.