An interim valuation has revealed that the Kenya Railways Corporation’s (KRC) vast land portfolio may have been undervalued by more than Sh140 billion, exposing years of failure to update property valuations as required under its own accounting policy.
The first major findings from an ongoing nationwide valuation exercise estimate the market value of KRC’s land assets in the Central Region alone at about Sh160 billion. This contrasts sharply with the Sh18.75 billion value recorded in the corporation’s books for the year ended June 2025, according to the latest report by Auditor-General Nancy Gathungu.
The valuation is being undertaken jointly by KRC and the Ministry of Lands after repeated audit queries over the reliability of the corporation’s land values reported in its financial statements.
Land surveys in the Coast and Western regions were expected to be completed by the end of last month, meaning the final value of KRC’s nationwide land portfolio is likely to be substantially higher once the exercise is concluded.
“Based on the findings, the estimated current market value of KR’s landed assets in the Central Region, for book purposes, stands at approximately Sh160 billion,” KRC management told the Auditor-General.
For years, auditors have questioned the accuracy of KRC’s property records, citing outdated valuations and incomplete ownership documentation. The latest audit found that 119 land parcels lacked ownership documents, while the corporation had failed to comply with its policy requiring land and buildings to be revalued every five years.
KRC told auditors that the valuation exercise, scheduled for completion by June 30, 2026, will assign current market values to railway land across the country and update the corporation’s asset register.
The exercise comes as KRC increasingly relies on its real estate portfolio to diversify revenue beyond passenger and freight services. Its land assets include railway reserves, commercial and residential properties, development land, museum sites and advertising spaces along the railway network.
During the year ended June 2025, the corporation redeveloped Msaada Estate in Mombasa, modernised the Aoko Road Estates in Nairobi, implemented a digital real estate management system to improve billing and rent collection, recovered illegally acquired railway land and leased the Konza–Athi River yard for commercial cargo storage.
Rental and investment properties generated more than Sh1.4 billion during the financial year, highlighting the growing importance of real estate to the corporation’s finances.
KRC continues to grapple with illegal land allocations, encroachment and weak asset records that have left valuable public property vulnerable.
The Auditor-General noted that land around Mombasa Railway Station was allocated to private individuals without KRC’s consent, while parcels at Limuru and Kikuyu railway stations were similarly allocated to third parties. The corporation said it is working with the Ethics and Anti-Corruption Commission, the National Land Commission, the Ministry of Lands and the courts to recover the affected properties.
The report also highlights continued occupation of railway land in Nakuru, where land at Ziwani has been converted into a county bus park, and 247 residential houses in Kisumu that remain occupied without lease agreements.
