Africa’s first student accommodation REIT was launched by Acorn Holdings, through its subsidiary Acorn Investment Management Limited (AIML) on February 2021 in Nairobi. Acorn Holdings provides purpose-built student accommodation in East Africa and are currently targeting over 50,000 students in Kenya.
Here are the four key things you need to know about them
1. Their REIT was 100% subscribed at launch, raising US$ 22 Million. InfraCo Africa, part of the Private Infrastructure Development Group (PIDG), featured as an anchor investor with a commitment of over US$10 million.
2. In 2019, with the support from GuarantCo, Acorn raised the first Green Housing Bond in Africa which was subsequently dual-listed on the Nairobi Stock Exchange and London Stock Exchange. In 2021, the company received approval from the Capital Markets Authority to raise the ceiling of its bond programme to KShs 5.7 billion from the previous Kshs 5 billion.
3. Acorn currently operates five properties located within Nairobi under the Qwetu brand with a capacity of 3000 beds. In addition, their development pipeline currently consists of an additional 5,000 beds across six development projects in Nairobi with completion expected over the next three years. Their latest partnership with the University of Nairobi (UoN) will see a total of 2,800 beds available to UoN students of which 837 are Qwetu beds and 1,950 are Qejani beds.
4. Acorn’s market offering cuts across range, from a middle-income target ranging between US$ 138 to US$295 per bed per month, to the ongoing affordable mass-market offering ranging between US$74 to US$111 per bed per month
Overall, across Africa, as investors hunt for yield intensifies, non-conventional property sectors such as Student or Young Professional Housing, Healthcare and Industrial are increasingly taking centre stage. Notable investments towards student accommodation include the partnership by Eris and IFC as well as the recently launched student accommodation REIT by Growthpoint.
Further, outside of South Africa, a widening supply gap continues to exist. As noted in this article, tertiary institutions across the continent on average can only accommodate between 10 and 25% of their students through campus hostels provided by schools. As such, our outlook for the sector remains positive underpinned by this increasing supply deficit and strong income profile. Indeed, some of the few developers including Student Accommod8, who have debuted into the market have seen incredible occupancy rates (typically achieving 90% occupancy within six months of completion), and considerably high annual rental yields ranging between 9% for basic hostel types and 25% for the premium products.
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