Acorn Investment Management Limited (AIML), the ASA REITs Manager and a subsidiary of Acorn Holdings Limited, has posted Sh283 million in profit after tax for the first half of 2023.

The announced profit is combined for the Acorn Student Accommodation Income REIT (ASA I-REIT) and the Acorn Student Accommodation Development REIT (ASA D-REIT).

Acorn Holdings Limited is the entity behind Qwetu and Qejani Student Residences with the firm exhibiting resilience and consistency in the past three years amid economic headwinds.

Acorn says the stellar half-year performance demonstrates the pliability of the Student Housing sector and continues to strengthen the trust and confidence of investors.

The company says the good show has resulted in an 80 per cent year-on-year spike in rights subscriptions by existing investors in the supplementary offers for both REITs in Q2 2023.

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Ahead of its open market phase, the ASA REITs is eyeing new institutional and retail investors through Vuka to the investment asset class after being certified as Shariah Permissible.

The ASA D-REIT plans to build and operationalize Purpose-Built Student Accommodation (PBSA) after Qwetu Hurlingham, Qwetu Aberdare Heights II and Qwetu and Qejani Karen.

The company realized an increase in its rental revenue from Sh139 million to Sh162 million for the six-month period ending June 30, 2023, compared to a similar period last year.

The sale of Qwetu Hurlingham and Qwetu Aberdare Heights II to the ASA I-REIT in Quarter 4 will pave way for the ASA D-REIT to pay its first dividend later this year as promised to investors during the launch in February 2021.

ASA D-REIT posted a profit growth from Sh105 million to Sh170 million, raising its Net Asset Value (NAV) from Sh5.6 billion to Sh6.5 billion and the per unit price from Sh23.87 to Sh25.31 in the last 12 months.

ASA D-REIT is also erecting new Qwetu and Qejani properties at JKUAT in Juja, Kenyatta University and Hurlingham even as it eyes new Nairobi CBD, Juja and Parklands locations.

The rental revenue realised by its ASA I-REIT also improved significantly from Sh186 million to Sh325 million.

Qwetu and Qejani Karen. PHOTO/ACORN

The rising interest rates saw the ASA I-REIT’s profitability decline to Sh113 million, as the distributable income rose to Sh93 million from Sh75 million compared to the previous year.

Based on its performance, the ASA I-REIT has announced an improved dividend payout of Sh87 million at the rate of Sh30 cents per unit.

“In a challenging economic environment, the financial performance of the ASA REITs continues to showcase our commitment to delivering value to our investors,” said AIML Managing Director Raghav Gandhi.

He added, “Now with the continuing scale-up of the portfolio, the REIT Manager is finding new opportunities to reduce cost by benefiting from economies of scale, which should help sustain profitable growth into the future.”