Acorn Holdings, a developer of student hostels, has managed to raise Sh2.5 billion in fresh financing as it commences divesting its stake in the lucrative development.

The firm on Wednesday commemorated the listing of its two Real Estate Investment Trusts (Reits) on the unquoted securities platform (USP) in the Nairobi Securities Exchange (NSE), in an event also attended by UK High Commisioner Jane Marriot.

With a view to expand the student accommodation development across the country, Qwetu student hostels has sought the backing of new investors.

The company converted its bond holdings into tradeable units in November after getting the requisite license from the Capital Markets Authority (CMA) to become a Reit manager.

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Ukur Yatani and Jane Marriot at the NSE Reits launch. PHOTO/COURTESY

The move seeks to provide investors with a more liquid channel to trade and exit from their holdings in the business entity.

“These Reits are projected to give long-term investors an 18 per cent return over a 10-year hold basis, which is significantly above most of the securities available locally,” Acorn Holdings Africa CEO Edward Kirathe said.

He added, “We have given investors the opportunity to participate in development and investment returns alongside Acorn in a well-governed structure without taking on risks involved in direct real estate investing.”

Acord Holdings has Sh7.5 billion in Assets Under Management (AUM) and is eyeing cash raised from the capital markets to expand to include rental housing for young graduates and families.

The firm says it will retain a majority stake in the project and only divest part of its holding, with the Investment Reit (I-Reit) set to be listed publicly within the coming two years.

Qwetu hostels. PHOTO/QWETU 

Acorn Holdings’ Qwetu Student hostels is currently comprised of approximately 3,000 beds and is targeting to grow the number to 6,500 beds in the short term.

Acorn became the first Kenyan outfit to be listed as a shilling-denominated bond on the London Stock Exchange (LSE) in January 2020 and raised Sh4.3 billion.

It is the first entity to establish a student accommodation Reit in Africa, with Treasury CS Ukur Yatani praising the move by the company as a key to affordable and sustainable housing.

“The solution in addressing challenges within our universities is in our midst. People are willing and closely partner with institutions. The role of government is only to provide the necessary environment by giving incentives,” said Yatani.