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Property developer Acorn set to transfer Sh3.5 billion hostels
Edward Kirathe, Chief Executive Officer, Acorn Holdings Limited during the official opening of Qwetu Aberdare Heights student accommodation. FILE PHOTO | DIANA NGILA | NMG
Property developer Acorn’s student accommodation Development Reit is set to transfer two completed hostel properties valued at Sh3.54 billion to the developer’s Investment Reit by the end of this year following their completion and occupation by learners.
The two hostels, Qwetu Hurlingham and Qwetu Aberdare Heights II, are situated in Hurlingham and USIU Road respectively.
The 832-bed Qwetu Hurlingham was valued at Sh2.08 billion at the end of June, the developer said in a semi-annual report on the D-Reit, while the 601-bed Aberdare Heights II was valued at Sh1.46 billion.
The developer added that Sh860.6 million will be taken out of the proceeds from the Hurlingham hostel transfer to settle debt attached to the project from the Acorn Green Bond.
“Regarding disposals, the sale of both Qwetu Hurlingham and Qwetu Aberdare Heights II is to be carried out within the year after obtaining the necessary approvals for exit into the ASA I-Reit. These are expected to be finalised in the second half of 2023,” said Acorn.
The D-Reit borrows funds for specific projects and uses the proceeds of the sale to settle the obligations.
The income-focused trust meanwhile absorbs the hostels from the development arm once they are completed, thereafter generating income from rent and utilities that are then distributed as dividends to Reit holders.
The rental fee for Acorn’s student rooms ranges from Sh9,900 to Sh14,500 per month, depending on the amenities and size of the space.
In addition to the Hurlingham and USIU hostels, Acorn has also completed the development of two other hostels in Karen under the Qwetu (542-bed) and Qejani (808-bed) brands under the D-Reit, although it has yet to announce the date of transfer to the income Reit.
It also has another two properties in Chiromo and near Kenyatta University under development under the Qwetu brand with a bed capacity of 1,514.
Under the Qejani brand, Acorn’ D-Reit has four properties in the pipeline at Chiromo, Kenyatta University, Jomo Kenyatta University of Agriculture and Technology (JKUAT) and Hurlingham, with a total bed capacity of 5,763.
Meanwhile, the ASA I-Reit held five properties—all under the Qwetu brand— with a bed capacity of 3,003 by the end of June, collectively valued at Sh6.56 billion.
