Acorn Holdings: Official Launch of the Acorn Student Accommodation REITs
3rd Mar 2021
This piece was originally published on the Acorn website here.
Pictured left to right are Edward Kirathe, Acorn Holdings Ltd CEO, Ukur Yatani, National Treasury Cabinet Secretary and Jane Marriott, British High Commissioner to Kenya.
NAIROBI, 24th February 2021 – 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. “There is considerable need to utilize the appropriate capital structures to finance the development of rental housing in Kenya. This has been done successfully in developed capital markets globally. These investment vehicles Acorn is launching today will play a crucial role in helping the Kenyan economy and real estate sector get back on its feet post-COVID,” 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.
British High Commissioner to Kenya Jane Marriott added; “Affordable 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 COVID-19.”
Edward Kirathe, Acorn 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 REITs are once again bringing a number of new firsts to our Capital Markets; first Development REIT globally, first Student Accommodation REITs 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 InfraCo Africa, local pension schemes, fund managers and insurance companies, who have invested in the two Acorn REITs. We are also grateful to the CMA, RBA and IRA for their support.”
InfraCo 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 4” agenda. As the anchor investor in the Acorn REITs, our involvement will also strengthen local capital markets to support similar infrastructure initiatives in the future.”