Acorn Holdings Ltd through its subsidiary Acorn Investment Management Limited (AIML) has launched two Real Estate Investment Trusts (REITs) that will give institutional investors the opportunity to get into the lucrative student housing market. The Acorn Student Accommodation Development REIT (ASA D~REIT) and the Acorn Student Accommodation Income REIT (ASA I-REIT) are expected to give long-term investors a blended return of 18% on a 10-year hold basis.
Speaking at the launch of the REITs, National Treasury Cabinet Secretary Ukur Yatani underscored the importance of diversified investment opportunities to Kenya’s economy. “Acorn’s proposal of a KES 30 billion investment in rental housing for students and young people over the next few years, will help drive and deepen investment in the Nairobi Securities Exchange {NSE) and spur the emergence of other segregated funds.” Said CS Yatani.
The need for student housing is clear as Kenya has a median age of 18 years with 75% of the total population being under 35 years old. The country has approximately 550,000 students enrolled in universities against a bed capacity of 40,000 beds.
“The government’s preference in meeting this deficit in housing, is to have the private sector come in and
make the investment while allowing universities to focus on their core mandate of tuition and research. This is the only way we believe we will be able to meet the demand innovatively, while ensuring that the available resources invested in our universities go towards core activities.” Said CS Yatani.
British High Commissioner to Kenya Jane Marriott added; “A/fordable housing is vital in securing quality jobs and driving forward prosperity for all Kenyans. Through this KES 1 billion investment, the UK is proud to support President Kenyatta’s initiative to build affordable homes, giving nearly 10,000 Kenyan students the best chance to succeed. This is just one small part of our economic partnership with Kenya, to mobilise more private investment and help a clean and resilient economic recovery after CDVID-19.”
Edward Kirathe, Acern Holdings Ltd CEO, said “Acorn is pleased to continue to develop our Kenyan Capital Markets by bringing good quality asset-backed and regulated issuances that have attractive returns, strong international institutional backing and the highest standards of corporate governance. The Acorn RE/Ts are once again bringing a number of new firsts to our Capital Markets; first Development REIT globally, first Student Accommodation RE/Ts in Africa and first issuance to list on the OTC segment of the Nairobi Securities Exchange. We are very grateful for the support and confidence that we have received from our anchor investor lnfraCo Africa, local pension schemes, fund managers and insurance companies, who have invested in the two Acorn RE/Ts. We are also grateful to the CMA, RBA and IRA for their support.”
lnfraCo Africa’s CEO, Gilles Vaes noted, “This subscription marks our first investment into affordable housing, and I am delighted to take this step with Acorn, a well-respected developer of high-quality student accommodation. Expanding Acorn’s student housing offering will support Nairobi’s university students to achieve their ambitions, underpinning Kenya’s future economic development under its “Big 411 agenda. As the anchor investor in the Acorn RE/Ts, our involvement will also strengthen local capital markets to support similar infrastructure initiatives in the future.”
